Housing affordability reaches all-time high in Q1 2012
Housing affordability in California set a new record high in first quarter 2012 rising to 56 percent, according to C.A.R.’s first quarter Housing Affordability Index. The increase can be attributed 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 percent in the first quarter of 2012, up from 55 percent in fourth-quarter 2011 and from 53 percent in first quarter 2011, according to C.A.R.’s Traditional Housing Affordability Index (HAI). The index was the highest since C.A.R. began tracking this statistic in 1988.
Home buyers needed to earn a minimum annual income of $55,688* (based on fourth quarter 2011 income data) to qualify for the purchase of a $276,040 statewide median-priced, existing single-family home in the first quarter of 2012. The monthly payment, including taxes and insurance on a 30-year fixed-rate loan, would be $1,392, assuming a 20 percent down payment and an effective composite interest rate of 4.16 percent. The effective composite interest rate in fourth-quarter 2011 was 4.30 percent and 4.90 percent 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 percent, San Bernardino County was the most affordable, while San Francisco County was the least affordable, with only 29 percent of households able to purchase the county’s median-priced home.