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Housing affordability drops as prices climb

Higher housing prices are making homes less affordable throughout California, and San Diego County is no exception.

According to a California Association of Realtors report, 38 percent of households could afford the median-priced home in San Diego County, compared to 43 percent in the fourth quarter of last year.

The survey placed the median price of a resold, single-family home at $412,320 during the first quarter, including taxes and insurance. To qualify for what has been estimated as a $1,960 monthly mortgage payment, the household would need to make $78,580 per year, according to C.A.R.

Statewide, the percentage of home buyers who could afford to purchase a median-priced, existing single-family home dropped to 44 percent in the first quarter of 2013, down from 56 percent in first-quarter 2012 and from 48 percent in fourth-quarter 2012, according to C.A.R.’s Traditional Housing Affordability Index.

C.A.R.’s index measures the percentage of all households that can afford to purchase a median-priced, single-family home in California. C.A.R. also reports affordability indices for regions and select counties within the state.

Home buyers statewide needed to earn an average minimum annual income of $66,800 to qualify for the purchase of a $350,490 median-priced, existing single-family home in the first quarter of 2013. The monthly payment, including taxes and insurance on a 30-year, fixed-rate loan would be $1,670, assuming a 20 percent down payment and an effective composite interest rate of 3.55 percent.

All regions of the state experienced significant year-over-year declines in housing affordability, with the Bay Area and Southern California counties recording the largest decreases in the index due to the higher home prices.

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