More than four of every five first-time home-shoppers can afford to buy an entry-level home in the Sacramento region, the second-highest rate in the state and a bright spot in what has been a rather dark real estate market.
The current 83 percent affordability rate for the four-county region is the highest since first-quarter 2000, when the California Association of Realtors started tracking the data. Affordability has increased five-consecutive quarters, and is almost double the record-low 42 percent in mid-2006, considered the peak of the housing market.
Of course, the region’s affordability rate has increased because of the dramatically lower home values – about 45 percent lower than the peak – and the rising number of foreclosures. So, what has been a much-appreciated market for first-time homebuyers, it has caused much concern for homeowners, especially those whose mortgages are more than the value of their property.
Sacramento-area’s affordability is based on an entry-level price of $151,300 with a 10 percent down payment and 3.39 percent adjustable interest rate. The buyer would need to earn at least $23,400 per year in order to afford the $780 mortgage, insurance and taxes.
Read more: Sacramento home affordability second highest in California | Sacramento Business Journal
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