SOURCE: CALIFORNIA ASSOCIATION OF REALTORS(R)

CALIFORNIA ASSOCIATION OF REALTORS(R)

November 15, 2010 11:05 ET

C.A.R. Reports First-Time Buyer Housing Affordability Improves Slightly in Third Quarter

LOS ANGELES, CA--(Marketwire - November 15, 2010) - Housing affordability among first-time home buyers improved slightly in the third quarter of 2010, both on a quarter-to-quarter and year-to-year basis, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today. The percentage of first-time buyers who could afford to purchase an entry-level home in California stood at 66 percent in the third quarter of 2010, according to C.A.R.'s First-time Buyer Housing Affordability Index (FTB-HAI). In the second quarter of 2010, the Index was a revised 65 percent and was 64 percent in the third quarter of 2009.

C.A.R.'s FTB-HAI measures the percentage of households that can afford to purchase an entry-level home in California. C.A.R. also reports first-time buyer indexes for regions and select counties within the state. The Index is considered the most-fundamental measure of housing well-being for first-time buyers in the state.

"With interest rates at historic lows, which have led to lower monthly mortgage payments, affordability continues to remain at near record-high levels in California," said C.A.R. President Beth L. Peerce. "Another high point for first-time buyers is the current ratio between the California median price and the California median household income. During the third quarter, the ratio stood at 5 to 1 and was at a level we haven't seen in the last 10 years. This is opening many doors for potential first-time buyers."

First-time buyers, who tend to purchase homes equal to 85 percent of the prevailing median price, needed to earn a minimum annual income of $42,300 to qualify for an entry-level home of $266,620 during the third quarter of 2010. The monthly payment, including taxes and insurance, was $1,410, assuming a 10 percent down payment and an adjustable effective interest rate of 3.66.

"Nearly every region in the state experienced an increase in first-time buyer housing affordability," added C.A.R. Vice President and Chief Economist Leslie Appleton-Young. "Much of the increase in affordability can be attributed to the slight decrease in the state's median home price during the third quarter."

At 85 percent, the High Desert region was the most affordable area in the state. The San Francisco Bay region was the least affordable in the state at 51 percent, followed by the Santa Barbara area and the Santa Clara County regions, both at 53 percent. 

To view C.A.R.'s third quarter First-time Home Buyer Housing Affordability Index, please visit:

Leading the way...® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States with more than 155,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

C.A.R. First-time Buyer Housing Affordability Index

C.A.R. Region   Q3 2010   Q2 2010   Q3 2009  
California   66   65 r 64  
California - Condos   73   70   68 r
United States   79   78   76  
High Desert   85   84   85  
Los Angeles County   57   56   52  
Monterey Region   64   62   66  
Northern California   70   68   63  
Northern Wine Country   62   61   58  
Orange County   56   54   51  
Palm Sprgs/Lwr Desert   75   72   74  
Riverside/SBernardino   78   77   78  
Sacramento County   82   80   78  
San Diego County   60   58   56  
San Francisco Bay   51   49   49  
San Luis Obispo County   54   48   47  
Santa Barbara Area   53   50   52 r
Santa Clara County   53   51   53  
Southern California   65   63   64 r
Ventura County   63   61   56  
County              
Alameda   53   51   52  
Contra Costa   44   43   42  
Fresno   79   77   76  
Marin   42   38   37  
Merced   84   83   83  
Riverside   77   75   78  
San Bernardino   81   81   81  
San Francisco   41   36   35  
San Mateo   42   41   40  
Santa Cruz   49   46   43  
Sonoma   64   62   60  

* -- percentage of California households that can afford to purchase an entry-level home

r - revised

Source: CALIFORNIA ASSOCIATION OF REALTORS®

C.A.R. Region Housing
Affordability Index
Entry-Level Price Monthly Payment Including Taxes & Insurance Minimum
Qualifying Income
California 66 $266,620 $1,410 $42,300
California - Condos 73 $218,310 $1,150 $34,500
United States 79 $151,220 $800 $24,000
High Desert 85 $108,230 $570 $17,100
Los Angeles County 57 $297,500 $1,570 $47,100
Monterey Region 64 $295,040 $1,560 $46,800
Northern California 70 $210,050 $1,110 $33,300
Northern Wine Country 62 $312,450 $1,650 $49,500
Orange County 56 $432,170 $2,280 $68,400
Palm Sprgs/Lwr Desert 75 $152,920 $810 $24,300
Riverside/SBernardino 78 $161,590 $850 $25,500
Sacramento County 82 $157,280 $830 $24,900
San Diego County 60 $329,470 $1,740 $52,200
San Francisco Bay 51 $500,600 $2,640 $79,200
San Luis Obispo County 54 $311,010 $1,640 $49,200
Santa Barbara Area 53 $373,060 $1,970 $59,100
Santa Clara County 53 $534,400 $2,820 $84,600
Southern California 65 $271,420 $1,430 $42,900
Ventura County 63 $377,090 $1,990 $59,700
County        
Alameda 53 $428,330 $2,260 $67,750
Contra Costa 44 $576,610 $3,040 $91,200
Fresno 79 $129,020 $680 $20,410
Marin 42 $685,360 $3,610 $108,400
Merced 84 $100,580 $530 $15,910
Riverside 77 $167,260 $880 $26,450
San Bernardino 81 $143,730 $760 $22,730
San Francisco 41 $573,500 $3,020 $90,710
San Mateo 42 $650,250 $3,430 $102,850
Santa Cruz 49 $442,530 $2,330 $69,990
Sonoma 64 $317,090 $1,670 $50,150

Source: CALIFORNIA ASSOCIATION OF REALTORS®

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