According to several recent studies, homes are more affordable nationwide than they have been in many years, enabling many buyers who previously might have been priced out of the market to become homeowners.
MAKING SENSE FOR MY READERS
MAKING SENSE FOR MY READERS
- Nearly 73 percent of all homes sold in the U.S. during the first three months of 2009 were considered affordable, according to a quarterly market analysis by the National Association of Homebuilders and Wells Fargo Bank. That was the highest percentage ever reported by the 18-year-old Housing Opportunity Index.
- According to the Index, a home is deemed affordable if a family making the median national income of $64,000 is able to purchase the property and devote no more than 28 percent of their income toward housing costs.
- The percentage of households that could afford to buy an entry-level home in California stood at 69 percent in the first quarter of 2009, compared with 46 percent for the same period a year ago, according to the CALIFORNIA ASSOCIATION OF REALTORS®’(C.A.R.) First-time Buyer Housing Affordability Index (FTB-HAI). The FTB-HAI measures the percentage of households that can afford to purchase an entry-level home in California.
- The minimum household income needed to purchase an entry-level home at $213,040 in California in the first quarter of 2009 was $38,090, based on an adjustable interest rate of 4.96 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 $1,270 for the first quarter of 2009.
- At $38,090, the minimum qualifying income was 42 percent lower than a year earlier when households needed $65,030 to qualify for a loan on an entry-level home. Recent decreases in home prices and mortgage rates have brought affordability into better alignment with income levels of the typical California household, where the median household income is $61,030.
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