- LOS ANGELES -- California households are making less
than half the income necessary to buy a median-priced home in the first
quarter of 2005.
-
- Statewide households, with a median household income
of $53,540, are $60,380 short of the $113,920 qualifying income needed
to purchase a median-priced home at $488,600 in California, according to
the California Association of Realtors (C.A.R.) Homebuyer Income Gap Index
(HIGI) report for the first quarter of 2005.
-
- The association's HIGI is a quarterly analysis of the
difference between the median household income and the qualifying income
needed to purchase a median-priced, single-family home in the state and
for selected regions within the state.
-
- The HIGI is calculated with the same assumptions used
to generate C.A.R.'s monthly Housing Affordability Index (HAI); a 20
percent
down payment and a monthly payment for principal, interest, taxes and
insurance
(PITI) that is no more than 30 percent of a household's income.
-
- For Southern California, the median-priced home was
$477,660,
which required a qualifying income of $111,370 to make the monthly PITI
payment of $2,780. However, the median household income for Southern
California
was $52,050, leaving an income shortfall of $59,320.
-
- "These numbers are particularly troubling for
would-be
first-time homebuyers, who often are locked out of homeownership because
of the lack of affordable homes for sale," said C.A.R. President Jim
Hamilton. "While home sales statewide continue to surge, the
California
real estate market is being dominated by repeat homebuyers, who account
for three out of four home purchases in the state."
-
- The HIGI for California increased 44.9 percent during
the first quarter of 2005 compared to the first quarter of 2004, when the
gap stood at $41,660, the median household income was $52,320, and
qualifying
income needed to purchase a median-priced home at $407,710 was
$93,980.
-
- "At $100,000, the household incomes of repeat
homebuyers
are much greater than the population as a whole," Hamilton said.
"Repeat
buyers also are able to take advantage of equity gains in their current
homes, with many making a down payment on their new home that's frequently
greater than 20 percent.
-
- "For those repeat buyers, the income gap can fall
as low as $23,320. Even though repeat buyers fare better than first-timers,
that's little consolation to Californians spending a significant portion
of their income servicing their monthly mortgage," Hamilton
added.
-
- According to the report, potential homebuyers in the
Central Valley, with a median household income of $41,040, had the smallest
income gap at $32,660, and needed a qualifying income of $73,700 to
purchase
a median-priced home at $316,100.
-
- The San Francisco Bay area had the highest gap in the
state at $92,930, where potential homebuyers had a median household income
of $67,770 but needed qualifying income of $160,700 to purchase a
median-priced
home at $689,240.
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