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CALIF. HOUSING AFFORDABILITY FALLS TO LOWEST LEVEL
SINCE NOV. '89
The percentage of households in California able to afford
a median-priced home stood at 18 percent in June, a 9 percentage-point
decrease compared to the same period a year ago when the Index
was at 27 percent, according to a C.A.R. report released today.
The June Housing Affordability Index (HAI) declined one point
compared to May, when it stood at 19 points.
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.
The minimum household income needed to purchase a median-priced
home at $469,170 in California in June was $111,690, based
on an average effective mortgage interest rate of 6.01 percent
and assuming a 20 percent downpayment. The minimum household
income needed to purchase a median-priced home was up from
$84,530 in June 2003, when the median price of a home was
$374,540 and the prevailing interest rate was 5.40 percent.
At 43 percent, the High Desert region was the most affordable
C.A.R. region in the state, followed by the Sacramento region
at 26 percent. The Santa Barbara and San Diego regions were
the least affordable in the state at 10 percent.
U.S. CONDO SALES SET NEW RECORD Sales of
existing condominium and cooperative sales set a record in
the second quarter, marking the first time this market segment
has ever approached the one-million sales level, according
to a recent NAR report. The seasonally adjusted annual rate
for existing condo and co-op sales jumped 6.6 percent to 996,000
units in the second quarter from a 934,000-unit rate in the
first quarter. Sales activity in the second quarter was 15.4
percent above the 863,000-unit sales level during the same
period in 2003. The median existing condo/co-op price during
the second quarter was $189,400, 12.1 percent higher compared
to the same quarter in 2003. In the West, existing condo and
co-op sales rose 6.8 percent to a record annual rate of 253,000
units in the second quarter and were 10.5 percent above the
sales rate during the same quarter in 2003. The median condo
price in the West was $226,200 in the second quarter, up 8.6
percent from a year ago.
MORTGAGE LOAN APPS INCREASE The Market Composite
Index, a measure of mortgage loan applications for purchases
and refinancings, increased 11.9 percent on a seasonally adjusted
basis for the week ending in August 13 from 616.1 one week
earlier, according to a report from the Mortgage Bankers Association
(MBA) released today. On an unadjusted basis, the Index increased
by 10.6 percent for the week ending August 13 compared with
the previous week and was down 5.5 percent compared with the
same week one year earlier. The refinance share of mortgage
activity increased to 40.7 percent of total applications for
the week ending August 13 from 37.2 percent the previous week.
The adjustable-rate mortgage (ARM) share of activity decreased
to 33.6 percent of total applications for the week ending
August 13 as compared with 34.2 percent the previous week,
according to the report.
FED RAISES KEY INTEREST RATE The Federal
Reserve voted last week to raise its target for the federal
funds rate by 25 basis points to 1.5 percent. "The stance
of monetary policy remains accommodative and, coupled with
robust underlying growth in productivity, is providing ongoing
support to economic activity," the Fed said in a prepared
statement. "In recent months, output growth has moderated
and the pace of improvement in labor market conditions has
slowed. This softness likely owes importantly to the substantial
rise in energy prices. The economy nevertheless appears poised
to resume a stronger pace of expansion going forward. Inflation
has been somewhat elevated this year, though a portion of
the rise in prices seems to reflect transitory factors." Even
with underlying inflation still expected to be relatively
low, the Fed said it is poised to respond to changes in economic
prospects as needed to fulfill its obligation to maintain
price stability.
Informatin provided by - C.A.R. Newsline is published by the
CALIFORNIA ASSOCIATION OF REALTORS®, a trade association representing
more than 135,000 REALTORS® statewide.
