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| Calif. remains least affordable state for housing | ||
SAN FRANCISCO - California
is holding on firmly to the title of the least affordable U.S. state
housing market as home prices in once-affordable inland areas soar,
according to reports Thursday by home builders’ groups.
California’s coastal areas have long had some of the priciest housing in the United States. Now home buyers are pushing east into the state’s interior, pushing up prices in cities and towns in central California and lowering the percentage of households there able to afford to enter the housing market. |
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“Every quarter, the picture gets bleaker for California families trying to achieve the American dream of homeownership,” said Robert Rivinius, chief executive of the California Building Industry Association. One measure of affordability is the percentage of households than can afford to buy a median-priced house. “During the 1990s, affordability was not great by national standards, but it still stood at 50 or 60 percent in many parts of the state,” said Rivinius. “Even in San Francisco, it was in the 20-percent range. But today, affordability can be measured in single-digits in half our metro areas, and less than 30 percent in our most affordable region. The national average, meanwhile, is 45.9 percent,” Rivinius said. Citing the National Association of Home Builders/Wells Fargo Housing Opportunity Index released Thursday, Rivinius noted that 29.3 percent of median-income families could afford to buy a new or existing home in California’s Tulare County, the state’s most affordable area, in the second quarter, compared with 35 percent in the prior quarter. Additionally, the percentage that could afford median-priced homes fell by at least 9 percentage points in each of the inland markets of Bakersfield, Chico and Redding. Meanwhile, coastal California was home to four of the five least affordable U.S. metro housing markets in the second quarter. Santa Barbara topped the list, with only 3.2 percent of households able to afford a median-priced home there. |
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The median price
paid for an existing, single-family detached home in California
soared 17.1 percent to $540,900 in July from a year earlier, marking
44 consecutive months the price has increased at a double-digit
rate from year-earlier periods, according to the California Association
of Realtors.
To keep up with soaring home prices, Californians are setting aside a dangerously large share of income for house payments and taking on risky mortgages, according to analysts. |
| According to the Public Policy Institute of California,
52 percent of Californians who bought a home in the last two years
spend more than 30 percent of their total income on housing. Last
year, 46 percent of mortgages used to buy homes in California were
interest-only for at least part of the loan’s term, up from
23 percent in 2003, according to LoanPerformance, a mortgage research
unit of First American Corp. |
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