SAN JOSE, Calif., Aug. 30 /PRNewswire/ -- The percentage of households that could afford to buy an entry-level home in Santa Clara County stood at 51 percent in the second quarter of 2010, according to the California Association of REALTORS®. It is lower than the 58 percent for the same period a year ago, but still double the 25 percent for the second and third quarters of 2007, the lowest since 2000 when C.A.R. started computing the index.
The minimum household income needed to purchase an entry-level home at $535,500 in Santa Clara County in the second quarter of 2010 was $88,250, based on an interest rate of 4.09 percent and assuming a 10 percent down payment. First-time buyers typically purchase a home equal to 85 percent of the prevailing median price. The monthly payment including taxes and insurance was $2,940 for the second quarter of 2010.
The highest affordability index for Santa Clara County occurred in the first quarter of 2009, at 62 percent. The second quarter of 2010 is the seventh consecutive quarter with the index above 50 percent. Of the 42 quarters since 2000, the index was higher than 50 percent for 15 quarters.
"Home prices in our region have gone up 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®. "The rising home prices indicate a strong and stable local market as many other markets in the state and country are still recovering. With the incredibly low interest rates, it's a good opportunity to buy, because a one-percentage drop in interest rates is equal to a 10-percent home price reduction when it comes to the buyer's monthly mortgage payments."
SCCAOR President Karl Lee can be reached for comments at firstname.lastname@example.org 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