Housing Affordability Sinks in California

Lower interest rates are offset by rising home prices during the last quarter of 2012. Less than half the population can afford a $353,000 home.

Higher home prices offset lower interest rates to reduce housing affordability in California during the fourth quarter of 2012, the California Association of Realtors reported Monday.

The percentage of home buyers who could afford a median-priced existing single-family home in California decreased to 48 percent at the end of 2012, down from 55 percent in the last quarter of 2011, according to CAR's Traditional Housing Affordability Index.

The Index is considered the most fundamental measure of housing well-being for home buyers in the state.

Home buyers needed to earn at least $66,940 a year to qualify for the purchase of a $353,190 statewide median-priced single-family home in the fourth quarter of 2012, CAR said.

The monthly payment, including taxes and insurance on a 30-year, fixed-rate loan would be $1,670, assuming a 20 percent down payment and an effective composite interest rate of 3.49 percent, according to CAR. The effective composite interest rate in the third-quarter of 2012 was 3.72 percent vs. 4.3 percent in the fourth quarter of 2011.

-- City News Service

JustUs February 27, 2013 at 08:15 PM
Btw, it would not surprise me in the least to see Obama come up with an equivalent housing program to "cash for clunkers" called "cash for crackerjack boxes". heh. :^)
Joker Joe February 27, 2013 at 08:19 PM
Jasper Great foresight. I have been telling my son that for many months. Told him not to try to pay down his 3 3/4% mortgage because as soon as the fed stops buying bonds the chances of inflation taking hold is enormous. The savings rates will go much higher as well as mortgages and the 3 3/4% mortgage he has will look like it is free money.
Joker Joe February 27, 2013 at 08:22 PM
Just Bo will not do that. He has nothing to prove now that he can't be elected again. He just has to concentrate on class warfare and the breaking of the American spirit by increasing debt & taxes.
jb February 27, 2013 at 09:01 PM
Looks like Cathy and William Bonney missed school the day they taught "common sense 101".
Joker Joe February 27, 2013 at 09:22 PM
Cathy jb says months ago.... "If Patch refuses to moderate the numerous comments spewed each day by justus, they will start losing readers. I am one of them ".. He is a liar. A useless twit!!!!


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