Higher home prices offset lower interest rates to reduce housing affordability in California during the fourth quarter of 2012, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported.
The percentage of home buyers who could afford to purchase a median-priced, existing single-family home in California decreased to 48 percent in the fourth quarter of 2012, down from 49 percent in third-quarter 2012 and from 55 percent in fourth-quarter 2011, according to C.A.R.’s Traditional Housing Affordability Index (HAI).
C.A.R.’s HAI measures the percentage of all households that can afford to purchase a median-priced, single-family home in California. C.A.R. also reports affordability indices for regions and select counties within the state. The Index is considered the most fundamental measure of housing well-being for home buyers in the state.
Home buyers needed to earn a minimum annual income of $66,940 to qualify for the purchase of a $353,190 statewide median-priced, existing single-family home in the fourth quarter of 2012. The monthly payment, including taxes and insurance on a 30-year fixed-rate loan, would be $1,670, assuming a 20 percent down payment and an effective composite interest rate of 3.49 percent. The effective composite interest rate in third-quarter 2012 was 3.72 percent and 4.30 percent in the fourth quarter of 2011.