Only 11 Percent of LA Can Buy A Home

Los Angeles continues to be unaffordable, and the politicians continue to do nothing about it. The latest grim figures from the California Association of Realtors indicate that as of November 2005 only 11 percent of households in Los Angeles could afford to purchase a median-priced home. Here's the press release, and at right is the breakdown for the state:

The percentage of households in California able to afford a median-priced home stood at 14 percent in November, compared with 19 percent for the same period a year ago, according to a report released today by the California Association of REALTORS® (C.A.R.).

C.A.R.’s monthly housing affordability index measures the percentage of households that can afford to purchase a median-priced home in California. C.A.R. also reports housing affordability indexes for regions and select counties within the state. The Index is the most fundamental measure of housing well-being in the state.

The minimum household income needed to purchase a median-priced home at $548,400 in California in November was $133,390, based on an average effective mortgage interest rate of 6.26 percent and assuming a 20 percent downpayment.

At 24 percent, the High Desert region was the most affordable C.A.R. region in the state, followed by the Sacramento region at 19 percent. The Northern Wine Country, San Luis Obispo and Santa Barbara regions were the least affordable in the state at 7 percent.

C.A.R.’s December 2005 sales and median price report for the state and regions within the state will be released on Wednesday, Jan. 25.

Leading the Way...® in California real estate for more than 100 years, the California Association of REALTORS® (www.car.org) is one of the largest state trade organizations in the United States, with more than 185,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

— The Boy in the Big Housing Bubble