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CALIFORNIA'S HOUSING AFFORDABILITY INDEX AT 19 PERCENT
IN SEPTEMBER The percentage of households in California
able to afford a median-priced home stood at 19 percent
in September, a 5 percentage-point decrease compared with
the same period a year ago when the Index was at 24 percent,
according to a recent C.A.R. report. The September Housing
Affordability Index (HAI) increased 1 percentage-point compared
with August, when it stood at 18 percent. C.A.R.'s monthly
housing affordability index measures the percentage of households
that can afford to purchase a median-priced home in California.
The index is the most fundamental measure of housing well-being
in the state. The minimum household income needed to purchase
a median-priced home at $465,540 in California in September
was $107,880, based on an average effective mortgage interest
rate of 5.70 percent and assuming a 20 percent downpayment.
The minimum household income needed to purchase a median-priced
home was up from $91,030 in September 2003, when the median
price of a home was $384,690 and the prevailing interest
rate was 5.94 percent. At 42 percent, the High Desert region
was the most affordable region in the state, followed by
the Central Valley region at 26 percent. The Santa Barbara
region was the least affordable in the state at 6 percent,
followed by the San Diego region at 11 percent.
BUILDER CONFIDENCE HOLDS STRONG AND STEADY IN NOVEMBER
Continuing low mortgage rates and improving economic
conditions have helped reinforce builder confidence in the
market for new single-family homes, according to the latest
National Association of Home Builders/Wells Fargo Housing
Market Index (HMI). The November HMI stood at 71, registering
no discernible change in builder attitudes following a four-point
increase in October.
NET COST OF LOAN ORIGINATION FELL 26 PERCENT IN
2003 According to the Mortgage Bankers Association's
2004 Cost Study, the net cost of originating a loan in 2003
was $739 on a per-loan basis. Calculated as the origination
fees less associated expenses such as loan officer and broker
commissions, overhead and production support expenses, last
year's net cost of loan origination decreased 26 percent
from 2002. Mortgage banks with the highest average percentage
of purchased production had the lowest net cost to originate,
coming in at $480 per loan. The 2004 Cost Study analyzed
trends in income, expenses, productivity and profitability
for one- to four-unit residential mortgage operations through
2003. The study also found that servicers of all sizes continued
to struggle financially, largely due to heavy amortization
of mortgage servicing rights. Servicing financial losses
averaged $166 per loan in 2003, according to the report.
HOUSING STARTS REBOUND SHARPLY IN OCTOBER
According to a report released by the U.S. Dept. of Commerce
today, housing starts increased 6.4 percent to a seasonally
adjusted annual rate of 2.03 million units in October. Single-family
starts increased 5.7 percent to reach a seasonally adjusted
annual rate of 1.65 million units, while multifamily starts
rose 9.5 percent to rate of 382,000 units. Regionally, the
Northeast posted the biggest increase in housing starts
at 20 percent, followed by an 8.6 increase in the Midwest.
The West and the South improved by 5.0 percent and 4.0 percent,
respectively. The number of building permits issued, which
can be an indicator of future building activity, declined
slightly, falling 0.7 percent to a seasonally adjusted annual
rate of 1.98 million units.
Information provided by - C.A.R. Newsline is published by
the CALIFORNIA ASSOCIATION OF REALTORS®, a trade association
representing more than 135,000 REALTORS® statewide.
