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California's Housing Affordability Index fell four points to 14 percent in August

October 6, 2005

lowest on record since 1989

The percentage of households in California able to afford a median-priced home stood at 14 percent in August, a 4 percentage-point decrease compared with the same period a year ago when the Index was at 18 percent, according to a report released today by the California Association of REALTORS® (C.A.R.). The August Housing Affordability Index (HAI) declined 2 percentage points compared with July, when it stood at 16 percent.

C.A.R.’s monthly housing affordability index measures the percentage of households that can afford to purchase a median-priced home in California. C.A.R. also reports housing affordability indexes for regions and select counties within the state. The Index is the most fundamental measure of housing well-being in the state.

C.A.R. HOUSING AFFORDABILITY INDEX *
  Aug-05 Jul-05   Aug-04  
California 14 16   18  
California - Condos 21 22   27  
United States 48 49   54  
C.A.R. REGION          
Central Valley 17 18   26  
High Desert 28 30   42  
Los Angeles 12 14   17  
Monterey Region 9 9   12  
Northern California 15 16   20  
Northern Wine Country 7 7   13  
Orange County 11 11   11  
Palm Sprgs/Lwr Desert 11 11   13  
Riverside/SBernardino n.a. 15   21  
Sacramento 19 20   26  
San Diego 9 9   10  
San Francisco Bay Area 12 12   14  
San Luis Obispo 10 10   14  
Santa Barbara County 6 7   12  
Santa Clara 18 18   23  
Ventura 13 13   14  
COUNTY          
Alameda 11 11   15  
Contra Costa 10 10   10  
Fresno 18 21   27  
Marin 11 11   14  
Merced 10 11   21  
Riverside n.a. 15   18  
San Bernardino n.a. 19   28  
San Francisco 9 9   11  
San Joaquin 11 11   19  
San Mateo 12 12   15  
Santa Cruz 10 11   14  
Sonoma 7 7   13  
Stanislaus 16 17   28  

* -- percentage of California households that can afford to purchase a median-priced home
r – revised 
Source: California Association of REALTORS®

Median Prices By Region - Current Month vs. Year Ago
  Aug-05 Jul-05   Aug-04  
Calif. (sf) $568,890 $540,900   $473,520 r
Calif. (condo) $433,040 $426,320   $370,700 r
C.A.R. REGION          
Central Valley $363,720 $356,260   $289,360  
High Desert $305,700 $298,950   $236,890  
Los Angeles $564,340 $543,890   $455,590  
Monterey Region $727,500 $729,250   $613,120  
Monterey County $690,000 $698,000   $555,000  
Santa Cruz County $783,000 $759,000   $639,000  
Northern California $440,420 $418,630   $366,050  
Northern Wine Country $640,700 $639,670   $505,790  
Orange County $716,300 $706,820   $649,590  
Palm Springs/Lower Desert $371,020 $371,390   $326,740  
Riverside/San Bernardino NA $384,910   $310,120  
Sacramento $394,450 $387,810   $328,410  
San Diego $616,870 $616,050   $579,040  
San Francisco Bay $730,360 $724,890   $644,920  
San Luis Obispo $566,510 $559,900   $454,720  
Santa Barbara County $819,850 $654,170   $541,670 r
Santa Barbara S.Coast $1,301,000 $1,340,000 r $997,300 r
N. Santa Barbara County $462,880 $462,690   $411,700  
Santa Clara $760,000 $750,000   $625,000  
Ventura $685,680 $694,690   $626,730  

na - not available
r - revised
The minimum household income needed to purchase a median-priced home at $568,890 in California in August was $133,800, based on an average effective mortgage interest rate of 5.87 percent and assuming a 20 percent downpayment. The minimum household income needed to purchase a median-priced home was up from $110,980 in August 2004, when the median price of a home was $473,520 and the prevailing interest rate was 5.83 percent.

The minimum household income needed to purchase a median-priced home at $220,000 in the U.S. in August 2005 was $51,740.

At 28 percent, the High Desert region was the most affordable C.A.R. region in the state, followed by the Sacramento region at 19 percent. The Santa Barbara region was the least affordable in the state at 6 percent.

Source: California Association of REALTORS



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