Entry-Level Housing Affordability at 25% in California

The percentage of households that could afford to buy an entry-level home in California stood at 25 percent in the first quarter of 2007, compared with 26 percent for the same period a year ago, according to C.A.R.'s First-time Buyer Housing Affordability Index (FTB-HAI).

The minimum household income needed to purchase an entry-level home at $480,670 in California in the first quarter of 2007 was $96,910, based on an adjustable interest rate of 6.3 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 first quarter of 2007.

At 44 percent, the High Desert region was the most affordable in the state, followed by the Sacramento region at 43 percent. Santa Barbara was the least affordable region in the state at 12 percent, followed by the Monterey region at 19 percent.

**Taken from the California Association of Realtors Bulletin, dated May 23rd, 2007.