The housing market in California gave a boost to first-time homebuyers, as more households in the state could afford an entry-level house in the second quarter compared to the same quarter last year, according to the latest affordability index released by the California Association of Realtors.
The Realtor group’s First-time Buyer Housing Affordability Index stood at 67 percent in the second quarter this year, up from 49 percent from the same time last year and down slightly from 69 percent in first-quarter 2009, according to a report released by California Association of Realtors.
The index measures the percentage of households that can afford to buy an entry-level home in California.
CAR estimated that households with a minimum income of $39,930 was required to purchase a median-priced entry-level home (at a cost of $224,180) in California during the second quarter, based on an adjustable interest rate of 4.92 percent and assuming a 10 percent down payment.
The income level was 34 percent lower than in second-quarter 2008, when a minimum household income of $60,460 was required to buy a median-priced home during that quarter, CAR reported.
The report also stated that first-time buyers typically purchased a home equal to 85 percent of the prevailing median price during the second quarter, and the monthly payment was $1,330, including taxes and insurance.
The median household income statewide is $61,030, CAR reported. A 6.4 percent increase in the price of an entry-level home from first-quarter 2009 to second-quarter 2009 caused a quarterly decline in the index.
The state’s High Desert region had an affordability rating of 86 percent, which was the highest in the state, while the San Luis Obispo County region was the least affordable at 50 percent, followed by the Orange County region at 53 percent.
–Riya V. Anandwala
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