November 04, 2005

C.A.R. survey reveals California households fall $73,810 short in income needed to purchase home

California Association of REALTORS® (C.A.R.) Homebuyer Income Gap Index™ (HIGI) report for the third quarter of 2005.

LOS ANGELES (Nov. 1) – California households, with a median household income of $54,140, are $73,810 short of the $127,950 qualifying income needed to purchase a median-priced home at $545,910 in California, according to the California Association of REALTORS® (C.A.R.) Homebuyer Income Gap Index™ (HIGI) report for the third quarter of 2005, released today.

The Association's Homebuyer Income Gap Index™ is a quarterly analysis of the difference between the median household income and the qualifying income needed to purchase a median-priced, single-family home for the state and for select regions within the state. The HIGI is calculated with the same assumptions used to generate C.A.R.’s monthly Housing Affordability Index (HAI): a 20 percent downpayment and a monthly payment for principal, interest, taxes and insurance that is no more than 30 percent of a household’s income.

The Homebuyer Income Gap Index™ for California increased 33.7 percent during the third quarter of 2005 compared with the third quarter of 2004, when the gap stood at $55,220, the median household income was $52,940, and qualifying income needed to purchase a median-priced home at $461,850 was $108,150.

Source: CAR.org