Possible positive trend for first-time buyers

Possible positive trend for first-time buyers
Historically, California often leads the nation in starting new real estate trends. Hopefully, that will be the case with the state's recently announced increased number of homebuyers who can afford an entry-level home. About 44 percent of households in the state could afford an entry-level home during the first quarter of this year, according to a report from the California Association of Realtors. That's up from 26 percent during the same quarter last year.

The minimum household income needed to purchase an entry-level home in California during the first quarter was $67,830, based on an adjustable mortgage interest rate of 5.65 percent and assuming a 10 percent down payment. First-time buyers typically buy a home equal to 85 percent of the prevailing median price in the area. For a home priced at $67,830, the minimum qualifying income was 30 percent lower than a year earlier when households needed $96,500 to qualify for a loan on an entry-level home. Recent decreases in home prices and low mortgage rates have brought affordability into better alignment with income levels of the typical household, the CAR report stated.

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