Housing affordability in California set a new record high in first quarter of this year, according to new data from the California Association of Realtors (CAR), which attributes the increase to record-low interest rates and stabilization in home prices.
The percentage of home buyers who could afford to purchase a median-priced, existing single-family home in California rose to 56%, up from 55% in fourth-quarter 2011 and from 53% in first quarter 2011. This is the highest level since CAR began tracking this statistic in 1988.
Home buyers needed to earn a minimum annual income of $55,688 to qualify for the purchase of a $276,040 statewide median-priced, existing single-family home in the first quarter, according to CAR. The monthly payment, including taxes and insurance on a 30-year fixed-rate loan, would be $1,392, assuming a 20% down payment and an effective composite interest rate of 4.16%. The effective composite interest rate in the fourth quarter of 2011 was 4.3% and 4.9% in the first quarter of 2011.
In the San Francisco Bay Area, housing affordability rose or remained stable in all counties except Contra Costa County, where affordability declined by one percentage point. At 78 %, San Bernardino County was the most affordable, while San Francisco County was the least affordable, with only 29% of households able to purchase the county's median-priced home.