... this story
$100K+ is median home threshold
By Gregory J. Wilcox
Daily News
presstelegram.com
Thursday, June 17, 2004 - The minimum household income required to buy the median price home in California rose above $100,000 for the first time in April as affordability sank an annual 7 percentage points to 20 percent, a trade group reported Thursday.
The Housing Affordability Index compiled by the California Association of Realtors slipped one percentage point from March in response to rising mortgage rates and prices that hit record levels across most of the state in April.
Affordability will continue to decrease because price records were shattered again in May and rates, while still low by historical standards, continued moving up, said Leslie Appleton-Young, the association's vice president and chief economist.
"The gulf between the housing haves and have-nots is widening. Clearly people that have owned for the last three, four or five-plus years are very happy with their decision," she said.
Two months ago a household in California needed to earn at least $102,550 to buy a home priced at the median $453,590. That's based on a 30-year loan at 5.42 percent.
This year the average low rate was 5.38 percent for the week ending March 18 and has been climbing since. Freddie Mac's survey for the week ending today found rates averaging 6.32 percent.
By comparison, a minimum household income of $84,510 was required to buy a home priced at the median $364,040 in April 2003.
Nationwide the median price in April was $176,000 and the minimum income requirement was $39,790.
The association's affordability index is based on the percentage of households that could afford to purchase the median priced home in their community. The lowest point was 14 percent in the spring and summer of 1989, a time when prices were lower but interest rates much higher than now. |
