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REALTOR®: Realtors celebrate National Homeownership Month

Wednesday, June 20, 2007

The National Association of Realtors® (NAR) and the Silicon Valley Association of Realtors® (SILVAR), as leading advocates for homeownership, understand the value and joy of owning a home. This month, as the nation celebrates National Homeownership Month, Realtor associations across the county are helping to raise awareness of homeownership and encourage more Americans to consider the benefits of owning their own home.

President George W. Bush declared June as National Homeownership Month with the goal of increasing minority homeownership in America by 5.5 million households by the end of the decade.

Though homeownership has generally increased among most minorities over the past three years, there is still a disparity between ownership levels for different groups. The homeownership rate for African American households during the fourth quarter of 2006 was 48.2 percent, while Hispanic households were at 49.5 percent. The homeownership rate for Asian, Native Americans and Pacific Islanders was 60 percent. By comparison, 76 percent of non-Hispanic whites were homeowners in the same period.

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

In California, the minimum household income needed to purchase an entry-level home at $480,670 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.
In Santa Clara County, the percentage of households who could afford to buy an entry-level home stood at 27 percent in the first quarter of 2007.

"Housing affordability will always be a problem because of what Silicon Valley is about," SILVAR President Mark Burns said. "The Silicon Valley area is one of the best places to live in California, the weather is great, the economy is good, and there is job growth."

"Economic pressure will continue to be brought on to provide subsidies for housing costs for our essential labor force that cannot afford to live here otherwise," said Burns. He indicated First-Time Homebuyer's programs and other programs for qualified individuals sponsored by public and private entities throughout the Valley are seeking to help bridge some of the gap in affordability.

National Association of Realtors Senior Economist Lawrence Yun said, "Buyers today need to have a traditional view that housing as a long-term investment is an added benefit to their shelter expense. If so, that investment generally will build a nice nest egg over time, especially if they use a traditional mortgage instrument that reduces debt."

"Californians, as much of the rest of the U.S., have a strong desire to own their own home and know the historic value and returns of investing in real estate," said Burns, a Realtor with Coldwell Banker.

Homeownership reaps benefits for the homeowner as well as the community. Through the Mortgage Interest Deduction (MID), homeowners are allowed to reduce their taxable income by a sizeable amount. Buying a home is also an investment because of equity gains and overall appreciation. In addition, studies show high and stable homeownership rates contribute many important social benefits by boosting the quality of living through education and civic involvement, while lowering crime rate and welfare dependency.

"Realtors don't just sell homes, they build communities, and we are committed to making homeownership a reality for those who strive to achieve it," said NAR President Pat V. Combs.


The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.

The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.

Variations of this article have appeared in local area newspapers.

For further information, please contact Rose Meily at SILVAR Public Affairs, email , or phone (408) 200-0109.

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