Skip to main content

Low Q4 Rates and Prices Lead to Record Home Affordability in California

NationalMortgageProfessional.com
Feb 11, 2011

The California Association of Realtors (CAR) has reported that first-time buyer housing affordability matched or set new record-high levels in all regions of the state during the fourth quarter of 2010. Led by historic-low interest rates and a slight decline in home prices, housing affordability surpassed or maintained current levels in both quarter-over-quarter and year-over-year comparisons statewide. The percentage of first-time buyers who could afford to purchase an entry-level home in California rose to 69 percent in the fourth quarter of 2010, matching the record-high set in the first quarter of 2009, according to CAR's First-Time Buyer Housing Affordability Index (FTB-HAI). In the third quarter of 2010, the Index was 66 percent, and was 64 percent in the fourth quarter of 2009, CAR reported. CAR’s FTB-HAI measures the percentage of households that can afford to purchase an entry-level home in California. CAR has also reported that first-time homebuyer indexes for regions and select counties within the state. The Index is considered the most-fundamental measure of housing well-being for first-time buyers in the state. “With incomes better aligned with home prices during the fourth quarter, affordability matched or exceeded record-high levels across the counties and regions of the state,” said CAR President Beth L. Peerce. “While this is an encouraging development, prospective home buyers want to see a recovery in the economy and have more confidence in their own personal situation before they’re willing to take advantage of higher affordability.” Mortgage rates in the fourth quarter were more than one percentage point lower than the year prior, enabling first-buyers with lower incomes to enter the homeownership arena. First-time buyers, who typically purchase homes equal to 85 percent of an area’s prevailing median price, needed to earn a minimum annual income of $39,600 to qualify for the purchase of an entry-level home of $256,220 during the fourth quarter. The monthly payment, including taxes and insurance, was $1,320, assuming a 10 percent down payment and an adjustable effective interest rate of 3.39 percent. At 85 percent, the High Desert region was the most affordable area in the state. Although affordability for first-time buyers increased in the San Francisco Bay region, the region was the least affordable in the state at 55 percent, followed by the San Luis Obispo County and Santa Clara County regions, both at 57 percent. Click here to view to CAR's historical housing affordability data. For more information, visit www.car.org.
CFPB New Rule Prevents Predatory Lending To Military Service Members

The CFPB stipulates its authority to examine supervised financial institutions for risk to active duty servicemembers and their dependents.

Industry News
Jun 16, 2021
Inventory Begins A Slow Recovery

Inventory grew 3.9% from April to May, according to Zillow's latest Market Report, after a year of steady decline.

Industry News
Jun 16, 2021
Mortgage Lenders Expect Profit Margins To Shrink

69% of lenders believe profit margins will decrease in the months ahead, while 19% believe profits will remain the same, and 11% believe profits will increase.

Industry News
Jun 14, 2021
Real Estate Industry Calls To End Eviction Moratorium On June 30, 2021

Expanding the moratorium will only increase levels of debt on renter households and impede the recovery of the housing sector.

Industry News
Jun 14, 2021
Fifth Third Bank Expands Down Payment Assistance Program

The program will provide up to $3,600 towards a down payment for families with low to moderate income.

Industry News
Jun 09, 2021
Filo Mortgage Launches Low-Rate Guarantee

National mortgage lender Filo Mortgage is offering to beat competitors' pricing by $1,000 with its Low-Rate Guarantee.

Industry News
Jun 08, 2021