By Steve Doyle, President of Brookfield Homes, San Diego/Riverside Division

The California Association of Realtors and the National Association of Home Builders/Wells Fargo both published reports on the status of housing affordability this past week. Roger Showley of the San Diego Union Tribune analyzed these reports. And, again, the reports show great news for San Diego residents!

The California Association of Realtors reports that 59% of the county residents could afford the median priced home in the second quarter of 2009. That is up from 46% for the same time period one year ago and dramatically up from the 27% figure calculated for 2007.

Affordability is determined by comparing the median cost of a home with the cost of financing its purchase for the household earning the median income in the county. For the 2Q09 period, the Realtors for that San Diego had a median price of $295,000 and a median household income of $52,550. Using prevailing interest rates and underwriting standards, the Realtors found that 59% of the families in San Diego County could afford to buy a home.

The National Association of Home Builders found that in the second quarter of this year, 56% of the homes sold in San Diego County were affordable to households making the median income. The NAHB/Wells Fargo Housing Opportunity Index noted that this index number had dropped from 58.8% in the first quarter of 2009. The report went on to note that in the fourth quarter of 2005, the index stood at only 3.6%!

The index is compiled from information including the median price of new and resale homes, the area household median income, prevailing interest rates and underwriting standards. According to the NAHB, the median price in San Diego County was $285,000 and the median income was $74,900.

No matter which report you follow, the news is good for San Diego families today, but both reports do show housing prices going up. With the median income holding steady and lending factors, like interest rates and down payment requirements under pressure, it is likely that the affordability indexes will continue to drop. This means if you are considering entering the home ownership ranks, the time is now to investigate those possibilities to their fullest. As the economy continues to improve through the balance of this year and into 2010, pressure on home prices will grow and opportunities to buy will likely decline.

To visit Steve’s blog, visit http://blog.brookfieldsd.com/.