Only 24% of Californians Can Afford Entry Level Housing
A recent study by the California Association of Realtors shows that only 24% of Californians have enough income to qualify for a typical entry-level home at $482,910. What do these numbers tell us? Simply, prices will have to drop before builders and home sellers will be able to move the standing inventory. With lending standards being tightened and the “no document” loan extinction, problems will continue in California’s real estate market for sellers. Buyers will be in the driver’s seat for some time.
“The California Association of Realtors said the minimum household income needed to purchase an entry-level home at $482,910 in California in the third quarter of 2007 was $99,590, based on an adjustable interest rate of 6.56 percent and assuming a 10 percent down payment. ”
Some areas did show higher levels of affordability “at 48%, the High Desert region was the most affordable in the state”.
