Bad Credit Online Magazine - Daily News and Advice on Credit, Debt and Mortgage : California real estate buyers spend too much on their mortgages

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September 18, 2005

California real estate buyers spend too much on their mortgages

The average single home price in California was $522,590 as of last May. If you think this is high, consider that San Francisco homes were on average selling at $765,000. Now California real estate is the most expensive in the nation leaving ever leading Hawaii at the second place.

The prices have been going only up for the last several years. What makes it simply astonishing is that according to California Association of Realtors, only 16% of households could afford homes at these levels. Many people are considering moving out of state and many have been doing just that. This is what fueled Las Vegas housing boom to the large extent. Still, in spite of all this, sale volumes are at record levels.

How is that possible? We attribute it to two main factors, willingness to sacrifice other expenses to become a homeowner, and availability of seemingly affordable mortgages in today's market, especially Interest Only and Option ARM mortgage programs.

Read the entire article from California Public Policy Institute

Posted in Real Estate at September 18, 2005 11:11 PM

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