BAP Blog The California Association of Realtors releases Q1 2011 Housing Affordability Index

Low interest rates, home prices contribute to higher affordability throughout California, C.A.R. reports: Housing affordability continued to improve throughout the state in the first quarter of 2011, led by low interest rates and home prices, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today. The percentage of buyers who could afford to purchase a median-priced, single-family home in California rose to 53 percent in the first quarter of 2011, up from 50 percent in fourth-quarter 2010 and 50 percent in first- quarter 2010, according to C.A.R.’s Traditional Housing Affordability Index (HAI). C.A.R.’s HAI measures the percentage of all households that can afford to purchase the median-priced, single-family home in California. C.A.R. also reports affordability indices for regions and select counties within the state. The Index is considered the most-fundamental measure of housing well-being for home buyers in the state. “While housing affordability has improved in the recent past, the cost of homeownership is expected to rise later this year when the conforming loan limit in high cost areas is reduced,” said C.A.R. President Beth L. Peerce. “Additionally, affordable loans, such as the 30-year fixed-rate mortgage, will be less available if the White House’s proposal to eliminate Fannie Mae and Freddie Mac is passed.” Mortgage rates in the first quarter of 2011 rose slightly from the fourth quarter of 2010, but were down from first-quarter 2010. Buyers needed to earn a minimum annual income of $60,090 to qualify for the purchase of a $278,430 median priced home in the first quarter of 2011. The monthly payment, including taxes and insurance, would be $1,500, assuming a 20 percent down payment and an effective composite interest rate of 4.90 percent. The Central Valley was the most affordable region of the state, with Merced posting an affordability index of 76 percent, Tulare County at 72 percent, and Kings County and Sacramento County both at 71 percent. The San Francisco Bay Region was the least affordable region of the state, with San Francisco, Marin, and San Mateo counties at 25 percent, 27 percent, and 28 percent, respectively. Visit http://www.car.org/marketdata/data/haitraditional/ to see C.A.R.’s historical housing affordability data. For first-time buyer housing affordability data, visit http://www.car.org/marketdata/data/ftbhai/. Leading the way…® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States with more than 160,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles