Group says more Californians can afford to buy their first home

Some 33 percent of households in the state were able to afford their first home in the last three months of the year, according to the CALIFORNIA ASSOCIATION OF REALTORS®. That’s up from 25 percent in the same three months of 2006. The trade group for real estate agents calculates affordability based on the minimum household income required to make a 10 percent down payment and secure an adjustable interest rate loan at 6.21 percent.

MAKING SENSE OF THE STORY FOR CONSUMERS

• As the median home price declines, many potential home buyers who had previously believed an entry-level home was out of reach may now find themselves in a position to buy.

• The median price of an existing, single-family detached home in California during December 2007 was $475,460, a 16.5 percent decrease from the revised $569,350 median for December 2006.

• Prospective buyers for the most part need not worry about the bidding wars that drove up home prices during the housing boom.

• First-time home buyers needed to earn an annual income of $82,200 to buy an entry-level home in California in the fourth quarter of 2007, down 15 percent from the $96,600 annual income needed to buy during the last three months of 2006.

www.TheMMTeam.com

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