Higher home prices offset lower interest rates to reduce housing affordability in California during the fourth quarter of 2012, the California Association of Realtors reported today.
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 the third-quarter 2012 and from 55 percent in the fourth-quarter 2011, according to CAR’s Traditional Housing Affordability Index.
The index measures the percentage of all households that can afford to purchase a median-priced single-family home in California.
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 single-family home in the fourth quarter of 2012, CAR said in a statement released at its Los Angeles headquarters.
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, according to CAR.
The effective composite interest rate in the third-quarter of 2012 was 3.72 percent and 4.30 percent in the fourth quarter of 2011.