Magazine article Mortgage Banking

California Entry-Level Affordability Improves Slightly in 2009

Magazine article Mortgage Banking

California Entry-Level Affordability Improves Slightly in 2009

Article excerpt

The California Association of Realtors[R] (CAR), Los Angeles, announced that housing affordability for entry-level homes improved just marginally in the fourth quarter of 2009 versus a year earlier. CAR reported that the median price of an entry-level home in the Golden State was $257,940 in last year's fourth quarter.

The realty trade group's First-time Buyer Housing Affordability Index stood at 64 percent in last year's final quarter, meaning 64 percent of households could afford to buy an entry-level home. That was up from a revised 61 percent in the fourth quarter of 2008, but was identical to the index reading in the third quarter of 2009. CAR reported that the minimum household income needed to buy an entry-level home in the state was $44,100 in the fourth quarter of 2009.

The income needed to buy an entry-level home was calculated based on adjustable-rate financing at an interest rate of 4.5 percent and assuming a 10 percent down payment. …

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