First-time buyer housing affordability in California improves

The California Association of Realtors reported housing affordability among first-time home buyers has improved slightly in the third quarter of 2010.

CAR’s First-Time Buyer Housing Affordability Index claims the percentage of first-time buyers who could afford to relocate into an entry-level home in California stood at 66 percent in the third quarter of 2010, which is up two percent from the third quarter of 2009 and up one percent from the second quarter of 2010.

Historically low interest rates have opened up opportunities for first-time buyers. "With interest rates at historic lows, which have led to lower monthly mortgage payments, affordability continues to remain at near record-high levels in California," said CAR president Beth L. Peerce.

Peerce noted another positive for first-time buyers which revolves around the current ratio between the median price and the state’s median household income. She added that, during the third quarter, the ratio stood at 5 to 1, a level the state hasn’t seen in the last ten years.

According to the National Association of Realtors, the median price of households in the Western United States in September was $213,600, which is 4.9 percent lower than September 2009.