The percentage of potential first-time homebuyers in California tied a record high in the fourth quarter at 69%, due to low interest rates and continuing price declines.
This is according to the California Association of Realtors’ First-time Buyer Housing Affordability Index. The other time the index was this high was in the first quarter of 2009.
For the third quarter last year, the index was 66% and for the fourth quarter 2009, it was at 64%.
“With incomes better aligned with home prices during the fourth quarter, affordability matched or exceeded record-high levels across the counties and regions of the state,” said CAR president Beth L. Peerce. “While this is an encouraging development, prospective home buyers want to see a recovery in the economy and have more confidence in their own personal situation before they’re willing to take advantage of higher affordability.”
However, the state's major population areas were at the lower end of the affordability spectrum. The San Francisco Bay Area had the lowest index in the state, 55%, although that is an improvement from 50% one year prior.
San Diego County was at 62%, up from 57% in the fourth quarter 2009, while Orange County was at 60%, up from 53% and Los Angeles County was at 59%, also up from 53%.
The High Desert region has the highest affordability index, 85%, up one percentage point, followed by Sacramento County at 83%, up from 79%, and Riverside/San Bernardino, 79%, also up a single percentage point.
According to CAR, the index for the U.S. is 80%, up two percentage points over the fourth quarter 2009.
CAR's first-time condominium buyer index was at 75%, up from 73% in the third quarter and 68% in the fourth quarter 2009.
