 |
|
|
|
|
The Real Deal
Picture imroves for buying a home
More people are seizing the American Dream thanks to an increase in the number of households in California able to afford a median-priced home. The latest figures show a 3 percent increase in October compared to one year ago at the same time, according to a report released by the California Association of Realtors.
The October 2001 Housing Affordability Index stood at 34 percent, up 1 percentage point from September and 3 points higher than October of 2000.
"Mortgage interest rates fell more than 1 percentage point in October compared to a year ago, which has helped offset an 8.5 percent increase in the median price of a single-family home in California," said the association's President Robert Bailey. "Affordability improved significantly in some regions of the state where the median price declined compared to last year.
"The greatest year-to-year regional improvement was in Santa Clara, where affordability climbed 12 points to 30 percent, as the median price decreased from $527,220 in October 2000 to $481,000 this year," Bailey said.
The California Association of Realtors monthly housing affordability index measures the percentage of households that can afford to purchase a median-priced home in California. The association also reports housing affordability indexes for regions and selected counties within the state. The index is the most fundamental measure of housing well-being in the state.
At 16 percent, San Francisco was the least affordable county in the state, followed by Contra Costa at 17 percent. For the San Francisco Bay Area, affordability was 25 percent. Santa Clara County's affordability index was 30 percent. In Southern California, San Diego was the least affordable at 29 percent, followed by Orange County at 31 percent. In Los Angeles County, affordability was 36 percent.
The ability to afford a home also hinges on getting a mortgage, so a recent announcement by Freddie Mac and Fannie Mae was good news for families who want to buy a home. Freddie Mac and Fannie Mae announced an increase in mortgage loan limits for single-family homes from $275,000 to $300,700, effective Jan. 1, 2002. The 9.3 percent change is consistent with the increase in the national average home price between October 2000 and October 20001 as record by the Federal Housing Finance Board.
"Based on our 2002 sales projection, we expect that 353,700 sales in the state will fall into the price range implied by the higher loan limits, an increase of 23,500 homes over the 2001 loan limits," said California Association of Realtors President Robert Bailey.
That means that an additional 20,200 California households will be able to take advantage of the new loan limit. Regionally, an additional 4,900 households in the San Francisco Bay Area fall into the new category.
The combination of more affordable housing and increased mortgage loan limits will hopefully open the doors for homebuyers who want to own their own home.
Information provided in this column is presented by the Realtor members of the Silicon Valley Association of Realtors at www.siliconvalley-realtors.org. Send questions on any topic to jnewton@jnpr.com.
|
|
|
|
Los Gatos, California Since 1881
