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Housing Affordability Sinks in California

Lower interest rates are offset by rising home prices during the last quarter of 2012. Less than half the population can afford a $353,000 home.

Higher home prices offset lower interest rates to reduce housing affordability in California during the fourth quarter of 2012, the California Association of Realtors reported Monday.

The percentage of home buyers who could afford a median-priced existing single-family home in California decreased to 48 percent at the end of 2012, down from 55 percent in the last quarter of 2011, according to CAR's Traditional Housing Affordability Index.

The Index is considered the most fundamental measure of housing well-being for home buyers in the state.

Home buyers needed to earn at least $66,940 a year to qualify for the purchase of a $353,190 statewide median-priced single-family home in the fourth quarter of 2012, CAR said.

The monthly payment, including taxes and insurance on a 30-year, fixed-rate loan would be $1,670, assuming a 20 percent down payment and an effective composite interest rate of 3.49 percent, according to CAR. The effective composite interest rate in the third-quarter of 2012 was 3.72 percent vs. 4.3 percent in the fourth quarter of 2011.

-- City News Service

tiny February 26, 2013 at 09:42 PM
I hear Doctor D is consulting with the unelected panel of experts who will be deciding thumbs up or down for procedures based on affordablity when the Fed is already buying 75-90% of the national debt. Should be loads of fun.
Kathi Thomas February 26, 2013 at 10:36 PM
It depends on whether you are a buyer or a seller.
JustUs February 26, 2013 at 11:25 PM
The Feds have already given thumbs down to PSA tests to detect prostate cancer (PC) in men unless it has already been determined that the patient has PC. The PSA test is really the only non-invasive way to determine if a man may have PC or not (as far as I know), unless it is so advanced that it has metasticized and the patient has some really serious symptoms. By that time often it's too late. Normally if the PSA reading is unusually high and increased significantly from the last measurement the man is sent in for a biopsy. Only then could it be determined whether cancer is present. It seems that the recommendation to drop the PSA tests could result in many lives lost that could have otherwise saved with modern medical techniques. Many doctors probably ignore the Fed's recommendation. After all, they are in the business of saving lives. But as the money problems escalate the Feds may well mandate their 'recommendations' on the docs, especially those on government subsidized health plans.
MFriedrich February 26, 2013 at 11:49 PM
Rising home prices means more future HELOC abuse as homedebtors begin to use their house as an ATM again. Let the good times roll !
Yeparoo February 27, 2013 at 12:31 AM
Did someone say HELOC? Kibbles n' bits, Kibbles n' bits! http://www.youtube.com/watch?v=VdNnjFwGFOM
Alberto Barrera February 27, 2013 at 01:48 AM
Looks like I'm going to have to leech off of my parents forever..... Free housing! WooHoo!
ydoanyting February 27, 2013 at 12:51 PM
Who wants to be a slave to a house and live pay check to pay check and pray there is never an emergency?
Joker Joe February 27, 2013 at 03:41 PM
Better to rent and pay the landlord's mortgage. Duhhh. Better the landlord gets the tax write off. Duhhh. Lot better when you retire to have a bunch of rent receipts then a payed off house. Duhhh.
Joker Joe February 27, 2013 at 04:06 PM
Lots of home buyers coming...... RELEASE UNDOCUMENTED IMMIGRANTS, GET $$ In an attempt to save money, the Department of Homeland Security is releasing some undocumented immigrants from immigration jails ahead of the automatic budget cuts slated to take effect this Friday. The “low priority” detainees are being released here in the U.S., even though they face the prospect of deportation. The average daily cost of detaining an immigrant is $122 to $164 per detainee, according to the ACLU. That equals $3,360 to $4,920 a month per illegal. They could easily make their house payments and then some. Wonder why the U.S. is in debt and broke? 4 more years.....
Dave February 27, 2013 at 05:04 PM
William, are you saying that jailed immigrants will drive up home costs because once they are released they will start buying up properties?
Joker Joe February 27, 2013 at 05:19 PM
Dave No. That was tongue in cheek. What I was really trying to bring forth was the waste in government. The sequester may be good in the long run. The deficit cannot continue. If the waste was eliminated, like promised 4 years ago, the housing would be much stronger then it is. If the illegals were shipped out to their own countries or incarcerated and made to pick those strawberries you hear about we would not need green cards and the produce would not go up in price because we now have free jailed labor. Matter of fact we could use all persons in jail to do the farm work instead of free room and board that cost us, the taxpayer $3,360 to $4,920 a MONTH. Of course I make cents, soooo it will be ignored by Obama and the administration as they raise our taxes. Much easier to do. 4 more years......
Dave February 27, 2013 at 05:28 PM
Thanks for clearing that up.I didn't think you meant it literally, but you never know on public forums. Waste is what politicians do. Every bill passed has a ton of pork added on. Obama is going on his 5th year of the campaign trail with no sign of him stopping anytime soon. It's been an embarrassment for our country that we have a president wearing such an empty suit. He created the sequester and has pointed the finger squarely at the republicans (not they they are a squeaky clean group either) and it's worked in the court of public opinion. Amazing.
Joker Joe February 27, 2013 at 05:40 PM
You are right on Dave. Just got to thinking again about the housing. If the government bought housing for illegals and put 10 of them in one house they would have over $50,000 a month to invest instead of having them in jail and not gaining anything. (a rent receipt) As the house appreciated in price the government could sell the house and either ship the illegals out to their own country on the chartered aircraft we charter twice a week or have them pick the produce so many are worried will go up in price. This is a win, win, proposition!!! (tongue in cheek)
JustUs February 27, 2013 at 06:11 PM
More selective anarchy at work, Bill Bonney. Now because of sequestration the Feds can't afford to bus immigration holds across into Mexico?? heh. I guess the Feds can't afford the bus fuel at today's gas prices. heh. These excuses are really getting hilarious. Obama will do anything not to be forced to 'eat his peas'. heh. Part of what caused the last economic meltdown is that banks were giving $600,000 sub-prime loans to illegal gardeners and janitors with no proof of income required. heh. The bankers knew full well that these people would never be able to pay their loans once the interest rates adjusted to the higher levels. The Register did a big investigative report on this, re: Washington Mutual Bank before it collapsed and got sold off. Ilegals got to live somewhere too! Either they live 20 to a household and bring blight to your local neighborhood or the banks have to provide them with 'liar loans'. They've turned American society into a clown circus void of enforced rules and regulations that made us 'civilized'. This is why the world laughs at us.
Yeparoo February 27, 2013 at 06:15 PM
Homes not affordable anymore, now cars not affordable either. http://www.cnbc.com/id/100500858 Funny thing is, only in the city of Washington DC can the average person afford the average car. Who knew all those government desk jobs were at the top of the employment food chain.
JustUs February 27, 2013 at 06:16 PM
"The deficit cannot continue." Bill, if they didn't run a deficit our GDP today would be @ minus 6%. The truth would be apparent. So now they've placed us between a rock and a hard place. They have to continue deficit spending so that the economy doesn't crash. Our Federal debt will be at $20T by the end of Obama's term. What happens when the interests rates are FORCED higher to historical norms of 6%-7%? It means that over a third of our budget goes to paying the interest to service the debt. How do you think that will work out? And there is NO WAY that they could raise the taxes high enough to compensate. That would kill the economy from the other end. So they have placed us into a fiscal dilemma that MUST END in financial disaster - one way or the other. There is now NO SAFE ROAD to travel. Whichever road they take sends us off the fiscal cliff. This is NOT CONJECTURE. It is simply mathematics that an 8th grader could do given the truthful and accurate variables.
JustUs February 27, 2013 at 06:20 PM
Come on. Obama was Professor of Constitutional Law at U of Chicago and it's become apparent that he doesn't even understand the US Constitution. heh. But what more would you expect from a 'community organizer'. So if he doesn't understand the basis of what he was trained in....how would you are anyone else expect him to understand how the economy works and what it takes to manage a fiscally responsible budget? Obama has proven to be a flim-flam man. Watching him operate is the equivalent of watching that old classic movie "The Flim-Flam Man" starring George C. Scott in real time.
Joker Joe February 27, 2013 at 06:28 PM
If you are smart you don't buy a new car. If you do it depreciates as you drive it out the door by at least 10%. Get a 2 yr. old car. It usually has a year left on the warranty also.
JustUs February 27, 2013 at 06:44 PM
Yep, who would have thought that a common ordinary beat cop with a high school education would make as much if not more than a licensed medical doctor and be allowed to retire earlier than one? America has turned communist. In the old Soviet Union the government jobs were the best jobs to have too. More truth.
MFriedrich February 27, 2013 at 06:58 PM
Also, if you can do it, save up and always pay cash for a vehicle. Renting money from the bank (auto loan) for an asset with an accelerated depreciation trajectory is just about the dumbest thing you can do.
Joker Joe February 27, 2013 at 07:15 PM
Remember when the interest on a car was tax deductible? I blame the schools for not teaching the common sense we as adults already know. Instead of teaching all students geometry I would rather see common sense 101 taught.
Cathy February 27, 2013 at 07:50 PM
The schools can't do that William. They are busy indoctrinating students to become sheep...easily manipulated by the media and their agenda.
Joker Joe February 27, 2013 at 07:57 PM
Amen sister!!!
Jasper Downs III February 27, 2013 at 08:07 PM
I'll make the contrarian case. If you are relatively young and have stable income prospects, load-up now on as much long term fixed rate debt as you can support. Use the proceeds on assets that will earn a return (purchase/remodel home, rental homes, investments etc.). If your debt is 30 year tenor then at some point in that period inflation will go up, rates will go up and wages will follow (even if they don't keep pace, they will still rise) but your debt payment will stay the same.
JustUs February 27, 2013 at 08:12 PM
I will drive my car until the tires rot off. After I observed all the fraud and misinformation in Obama's 'cash for clunkers' program I refuse to play the American retail car game anymore. If you folks want to play it.....knock yourselves out.
JustUs February 27, 2013 at 08:15 PM
Btw, it would not surprise me in the least to see Obama come up with an equivalent housing program to "cash for clunkers" called "cash for crackerjack boxes". heh. :^)
Joker Joe February 27, 2013 at 08:19 PM
Jasper Great foresight. I have been telling my son that for many months. Told him not to try to pay down his 3 3/4% mortgage because as soon as the fed stops buying bonds the chances of inflation taking hold is enormous. The savings rates will go much higher as well as mortgages and the 3 3/4% mortgage he has will look like it is free money.
Joker Joe February 27, 2013 at 08:22 PM
Just Bo will not do that. He has nothing to prove now that he can't be elected again. He just has to concentrate on class warfare and the breaking of the American spirit by increasing debt & taxes.
jb February 27, 2013 at 09:01 PM
Looks like Cathy and William Bonney missed school the day they taught "common sense 101".
Joker Joe February 27, 2013 at 09:22 PM
Cathy jb says months ago.... "If Patch refuses to moderate the numerous comments spewed each day by justus, they will start losing readers. I am one of them ".. He is a liar. A useless twit!!!!

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