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Median-Priced Home Too Expensive For Most California Buyers

Home buyers needed to earn at least $66,940 a year to qualify for the purchase of a $353,190 statewide median-priced single-family home in the fourth quarter of 2012, CAR said.

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 Monday.

The percentage of home buyers who could afford a median-priced existing single-family home in California decreased to 48 percent at the end of 2012, down from 55 percent in the last quarter of 2011, according to CAR's Traditional Housing Affordability Index.

The Index is considered the most fundamental measure of housing well-being for home buyers in the state.

Home buyers needed to earn at least $66,940 a year to qualify for the purchase of a $353,190 statewide median-priced single-family home in the fourth quarter of 2012, CAR said.

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 vs. 4.3 percent in the fourth quarter of 2011. --City News Service

Arthur Spooner February 26, 2013 at 10:25 PM
Yep the likes of Moonbeam and his cronies are letting it happen much faster too.
Louison Bobet February 27, 2013 at 12:27 AM
Who's got 70k to put down anyway. Not many in my circle of friends. For most of us coming out of a bad economy, it's going to be years to come up with that kind of savings, and then what, you give it to the bank for your downpayment, and you have little to no savings left for yourself. Same ugly cycle as before. There has to be a better way.
LBV Collins February 27, 2013 at 05:09 AM
HI Martha. I agree that home buyers should use caution, and that there may be an artificial bubble afoot, but I think that the bubble will be tiny. I get the impression that the upward pressure in homes is due to the typical spring time home buying season effect, and we may see demand (and prices) ease a bit later in the year. According to CoreLogic, the shadow inventory continues to fall. They note there's only a seven month supply of homes. [1] And according to this fellow's chart, housing prices are in-line with where they should have been had we not had that disastrous bubble a few years ago. [2] 1. http://www.corelogic.com/about-us/news/corelogic-reports-shadow-inventory-continues-decline-in-october-2012.aspx 2. http://www.jparsons.net/housingbubble/
julian February 27, 2013 at 08:54 PM
If you can't afford it, then don't buy it. Seems so simple. I for one think prices are out of control in California, and will continue to be as long as people look at housing as an investment and speculate. There aren't enough high paying jobs to support such a market.
James Festini March 07, 2013 at 10:41 PM
It's 2005 all over again.

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