The California Association of REALTORS® reports the percentage of households that could afford to buy an entry-level home in California was 69 percent in the first quarter of 2009, compared with 46 percent for the same period last year.
The C.A.R. report states 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 41 percent lower than a year earlier, when households needed $65,030 to qualify for a loan on an entry-level home.
Affordability is now in better alignment with the income level in California, according to Julia Truesdale Keady, president of the Silicon Valley Association of Realtors.
"Favorable buying conditions are creating a window of opportunity for potential home buyers, but it's important it is for home buyers to stay within their budget," advised Keady. "There are many good incentives and opportunities for potential buyers who have good income, excellent credit and are able to provide the needed down payment. As always, potential buyers should seek the advice of a professional REALTOR® who is knowledgeable about the local market and can help them arrive at a decision that is right for them."
In Santa Clara County, the percentage of households that could afford to buy an entry-level home was at 62 percent in the first quarter of 2009, up from 33 percent in the first quarter of 2008. The minimum household income needed in Santa Clara County to purchase an entry-level home at $382,500 in the first quarter of 2009 was $68,380. The monthly payment including taxes and insurance was $2,280 for the first quarter of 2009.
At 83 percent, the High Desert region was the most affordable area in the state. The San Luis Obispo County region was the least affordable in the state at 49 percent, followed by the Orange County region at 56 percent.
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 email or call the SILVAR office at (408) 200-0100.