Housing has become much more affordable to many more California households, according to a report released Wednesday by the California Association of Realtors.
Finding a positive spin to the state’s real estate meltdown — perhaps like reminding Titanic passengers of the health benefits of swimming — the CAR report said that 59% of California households could afford to buy an entry-level home in the state during the fourth quarter of 2008, compared to 33% a year earlier.
“Recent decreases in home prices and mortgage rates have brought affordability into better alignment with income levels of the typical California households,” according to a news release from the realtors’ association.
The minimum household income needed to purchase an entry-level home at $248,030 in California in the fourth quarter of 2008 was $48,900, based on an adjustable interest rate of 6.02% and assuming a 10% down payment, CAR reported.
That minimum qualifying income was 42% lower than a year earlier, when households needed $83,700 to qualify for a loan on an entry-level home, the group said.