IndiaPost.com - Housing affordability at 25 % in California

LOS ANGELES: The percentage of households who could afford to buy an entry-level home in California stood at 25 percent in the fourth quarter of 2006, compared with 27 percent for the same period a year ago, according to a report released today by The California Association of Realtors® (CAR). CAR's First-time Buyer Housing Affordability Index (FTB-HAI) measures the percentage of households that can afford to purchase an entry-level home in California. C.A.R. also reports first-time buyer indexes for regions and select counties within the state.

The Index is the most fundamental measure of housing well-being for first-time buyers in the state. The minimum household income needed to purchase an entry-level home at $477,400 in California in the fourth quarter of 2006 was $96,760, based on an adjustable interest rate of 6.36 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 $3,230 for the fourth quarter of 2006. At 41 percent, the High Desert and Sacramento regions were the most affordable CAR regions in the state. Santa Barbara and Los Angeles were the least affordable regions in the state at 19 percent.