Wednesday, July 30, 2014
PLACERVILLE, CALIFORNIA
99 CENTS

State’s housing affordability climbs

By
From page C6 | February 24, 2012 |

SACRAMENTO — Housing affordability continued to increase in all but three of the state’s metropolitan areas included in the report and reached the highest statewide level since the California index was developed in 2007, the California Building Industry Association recently announced.

On a statewide basis, the National Association of Home Builders/Wells Fargo Housing Market Index (HOI) found that a family earning the median income could have afforded 66.2 percent of the new and existing homes that were sold during the fourth quarter, up from 63.5 percent in the third quarter.

It was the highest statewide affordability level recorded since the California-specific HOI began in 2007 with the previous high being set in the first quarter of 2011 with a level of 64.6 percent. In contrast, the lowest statewide level was recorded with the inaugural state index in the first quarter of 2007 with an affordability reading of 11.2 percent.

Mike Winn, CBIA’s president and CEO, noted that the sharp rise in affordability was good news for those who qualify and can take advantage of low prices coupled with record-low interest rates.

“The glut of foreclosures that has flooded the market in recent years has really brought prices down for both new and existing homes and is the primary reason for these historically high affordability levels,” said Winn. “Clearing out unsold inventory and getting job-generating home construction back to healthy levels would give a much-needed jumpstart to our overall economy. While lending standards remain incredibly strict, now would be an opportune time for those who qualify to take advantage of low prices and record-low interest rates as we may finally be turning the corner on this housing downturn.”

The San Francisco, San Mateo and Marin County metro area was once again California’s least affordable metro area for the 13th consecutive quarter, and third in the nation, with just 37.1 percent of the homes sold being affordable to a family earning the median income, up from 32.9 percent in the third quarter. Orange County was California’s second-least affordable market, and fourth in the nation (47.4 percent), followed by Los Angeles County (48.3 percent) as the state’s third-least affordable market.

The New York City metro area continued to hold the title of the nation’s least-affordable market for the 15th consecutive quarter with 29 percent affordability, followed by Honolulu, Hawaii, in second with 34.3 percent affordability.

Of the state’s 28 metropolitan areas included in the report, the three that showed decreases in affordability were Tulare County, Imperial County and Butte County.

Sutter and Yuba counties were again California’s most affordable metro area with 92.5 percent affordability, up from 89.3 percent in the third quarter. Stanislaus County was the state’s second-most affordable market with 91.5 percent affordability, followed by Merced County with 91.2 percent affordability.

Nationwide, 75.9 percent of new and existing homes sold in the fourth quarter were affordable to families earning the national median income, up from 72.9 percent in the third quarter and the highest level recorded in the 20-year history of the index. Kokomo, Ind., was the nation’s most affordable housing market with an affordability ranking of 99.2 percent, followed by Fairbanks, Alaska, with a ranking of 97.5 percent.

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