The percentage of households in California able to afford a median-priced home increased by three percentage points in October compared to a year ago, according to a report released today by the California Association of REALTORS* (C.A.R.).

The October 2001 Housing Affordability Index (HAI) stood at 34 percent, up three points from 31 percent in October 2000, according to C.A.R. The October HAI increased one percentage point compared to September 2001, when it stood at 33 percent.

"Mortgage interest rates fell more than one percentage point in October compared to a year ago, which has helped offset an 8.5 percent increase in the median price of a single-family home in California," said C.A.R. President Robert Bailey. "Affordability improved significantly in some regions of the state where the median price declined compared to last year.

"The greatest year-to-year regional improvement was in Santa Clara, where affordability climbed 12 points to 30 percent, as the median price decreased from $527,220 in October 2000 to $481,000 this year," Bailey said. 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 selected counties within the state. The index is the most fundamental measure of housing well-being in the state.

At 16 percent, San Francisco was the least affordable county in the state, followed by Contra Costa at 17 percent. For the San Francisco Bay Area, affordability was 25 percent. In Southern California, San Diego was the least affordable at 29 percent, followed by Orange County at 31 percent. In Los Angeles County, affordability was 36 percent. C.A.R.'s monthly existing home sales and price report for November will be released on Dec. 20.

Published: December 6, 2001

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