Affordability drops for California homebuyers

A sold sign is posted in front of a home for sale on July 30, 2013 in San Francisco, California. The report notes that people in California spend more of their income on housing than anywhere else in the country.

Rising home prices and mortgage interest rates in California shut out a large number of potential homebuyers, according to data published by the California Association of Realtors.

Rising home prices and mortgage interest rates in California shut out a large number of potential homebuyers, according to data published by the California Association of Realtors. As The Los Angeles Times points out, thirty-six percent of California could afford a single-family home in the second quarter, which dropped from 44% in the first quarter.

People who would to buy a house now need to earn a minimum of nearly 80,000 a year to qualify for an average price home of $415,770. Part of the problem is that people are not earning more money, but the price of homes continues to rise. The most affordable part of the state are the areas in central valley with 71% of people able to purchase a home in this area.

Are you in the market to buy a house in California, does this deter you from buying now? If you own a house, is this a good time sell?

Guests:

Leslie Appleton Young, chief economist at the California Association of Realtors

Richard Green, director of the USC Lusk Center for Real Estate