Santa Clara County First-Time Buyer Housing Affordability at 53 Percent in Q3 2010

SAN JOSE, Calif., Nov. 29, 2010 /PRNewswire/ -- Fifty-three percent of households in Santa Clara County could afford to buy an entry-level home in the third quarter of 2010, according to the California Association of REALTORS®.

It went up 1 percent from the previous quarter, and remained the same as that of the third quarter of 2009. It more than doubled the 25 percent for the second and third quarters of 2007, which was the lowest in the past decade.

"Home prices in Santa Clara County are stabilizing since the low of early 2009, but they are still affordable compared with historical data," said Karl Lee, president of the Santa Clara County Association of REALTORS®. "Affordable prices, coupled with incredibly low interest rates, make it a good time to buy.  A one-percent increase in interest rates is equal to a 10-percent home price increase when it comes to the buyer's monthly mortgage payments. We encourage qualified buyers to lock into a home before interest rates start climbing."

C.A.R.'s housing affordability index is based on the median price of existing single-family homes sold according to MLSs. A first-time buyer is assumed to buy a home at a price equal to 85 percent of the median price and to make a 10 percent down payment. The buyer's monthly payment is based on the rate, points and fees of the one-year, adjustable-rate mortgage reported in Freddie Mac's Primary Mortgage Market Survey.

The highest First-Time Buyer Affordability Index for Santa Clara County occurred in the first quarter of 2009, at 62 percent. The third quarter of 2010 is the eighth consecutive quarter with the index above 50 percent. Of the 43 quarters since 2000, the index was higher than 50 percent for 16 quarters.

SCCAOR President Karl Lee can be reached for comments at [email protected] or 408.205.1726.

About the Santa Clara County Association of REALTORS®

SCCAOR, established in 1896, is California's oldest and Northern California's largest real estate association. We represent 7,000 REALTORS® and affiliate members. SCCAOR exists to meet the business, professional and political needs of its members and to promote, protect homeownership and private property rights.

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SOURCE Santa Clara County Association of REALTORS

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