You Need to Earn $159k a Year to Buy the Typical O.C. Home #realestate #homeownership #investment

Source:  Orange County Register

You needed a six-figure income to afford a typical house sold in the Los Angeles metro area this past summer, according to the latest California Association of REALTORS housing affordability index.  The minimum income needed to afford the median-priced house in the Los Angeles metro area was $101,270 during the third quarter, up $10,000 from the same quarter in 2016.  That's an 11 percent increase.

C.A.R. assumes you're using conventional financing - that it, making a 20 percent down payment on a 30-year fixed-rate mortgage.  And it uses the traditional affordability metric of paying no more than 30 percent of gross earnings on your monthly house payment.

Some professionals say buyers often can stretch their incomes and buy with smaller down payments or adjustable-rate loans to reduce the minimum income needed.  But the C.A.R. index shows that steadily rising home prices continue to erode into consumers' ability to switch from renting to home-ownership.

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