California home affordability improves

Bloomberg News

LOS ANGELES — The percentage of California households able to afford a median-priced home exceeded the year-earlier level in February, for the first time in nearly two years, thanks to lower interest rates, a new report shows.

The February 2001 Housing Affordability Index stood at 35 percent, up 1 point from February 2000, according to the California Association of Realtors. The index has been rising month-to-month since October. The percentage is still below the national figure of 57 percent.

"Over the last few months we've finally begun to see the impact of lower interest rates translate into an improvement in housing affordability," said association president Gary Thomas.

San Francisco, where 11 percent of households can afford a median-priced home, remained the least affordable county, followed by San Mateo at 14 percent and Contra Costa and Santa Cruz at 15 percent. In Southern California, San Diego County was the least affordable at 25 percent, followed by Orange County at 28 percent and Los Angeles and Ventura at 37 percent.

California's most affordable region remains the High Desert, where 64 percent of households can afford a median-priced home.