Housing Affordability for
Entry-Level Buyers

By Elke Duffy, Broker
Amador Realty, www.amadorrealty.com

According to an article released by C.A.R. (California Association of Realtors®) on August 14, 2009, the First-time Buyer Housing Affordability Index stood at 67 percent in the second quarter of 2009. This is a significant increase over the second quarter of 2008 when the index was at 49 percent.

The minimum household income needed to purchase an entry-level home priced at $224,180 in California in the second quarter of 2009 was $39,930, based on an adjustable interest rate of 4.92 percent and assuming a 10 percent down payment. First-time buyers typically purchase a home equal to 85 percent of the prevailing median price. The monthly payment including taxes and insurance was $1,330 for the second quarter of 2009.

It is worth noting that the First-time Buyer Housing Affordability Index declined 2 percentage points in the second quarter of this year compared with the first quarter of 2009, due to a 6.4 percent increase in the price of an entry-level home.

At 86 percent, the High Desert region was the most affordable area in the state. The San Luis Obispo County region was the least affordable in the state at 50 percent, followed by the Orange County region at 53 percent. The First-time Buyer Housing Affordability Index for the United States as a whole was 76 percent compared to California's 67 percent.

COPYRIGHT 2009 AMADOR COUNTY CHAMBER OF COMMERCE