First Time Home Buyers Find Housing Affordable in California | Irvine Real Estate | Irvine Homes for Sale

by Robert Mack on February 15, 2011

in Buyers, Latest News

The California Association of Realtors (CAR) reports that first time home buyer affordability matched or set new record levels in all regions of the state in the fourth quarter. CAR claims that historic low rates and declining home prices pushed housing affordability to surpass or maintain current levels in quarter over quarter and year over year comparisons statewide.

According to CAR’s First Time Buyer Housing Affordability Index (FTB-HAI), the percentage of first time buyers who could afford an entry-level home rose to 69 percent in the fourth quarter of 2010, outpacing the third quarter of 2010 at 66 percent and far above the fourth quarter of 2009 at 64 percent.

“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 C.A.R. 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.”

Affordability in the fourth quarter was assisted by mortgage rates that were more than one percentage point lower than the previous year. 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.

The most affordable area in the state was the High Desert region at 85 percent. The Bay area continued to be the least affordable with San Francisco continuing to be at the bottom of the list at 55 percent. San Luis Obispo County and Santa Clara County regions followed with 55 and 57 percent respectively.

Posted on Irvine Orange County Real Estate Market News

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