“New” loan limits fail to improve homeownership opportunities for Californians: The cost of financing a home will remain prohibitive for many households in California in the wake of the Office of Federal Housing Enterprise Oversight (OFHEO) conforming loan limits for 2007.  The maximum 2007 conforming loan limit for single-family mortgages will remain at $417,000, unchanged from the 2006 level established last year.  The conforming loan limit determines the maximum size of a mortgage that Fannie Mae and Freddie Mac can buy or guarantee.

C.A.R. President Colleen Badagliacco says “the median price of a home in California exceeds the national median by 79 percent, yet California is not recognized by OFHEO as a ‘high-cost’ state.  Alaska, Hawaii, Guam and the U.S. Virgin Islands are recognized by OFHEO as ‘high-cost’ areas.  Surely California deserves the same consideration.  California has the third highest home price in the nation, compared with Hawaii at seventh, and Alaska, which ranks 39^th in terms of median home price.

California has the second lowest rate of homeownership in the nation, where even the most “affordable” parts of the state have home prices in excess of $300,000.  Non-conforming or jumbo loans typically carry a higher mortgage interest rate than a conforming loan, increasing the monthly payment and negatively impacting affordability for households in California.”

The CALIFORNIA ASSOCIATION OF REALTORS® reports that sales decreased 28.7 percent in October in California compared with the same period a year ago, while the median price of an existing home increased 2 percent.

The median price of an existing, single-family detached home in California during October 2006 was $548,680, a 2 percent increase over the revised $537,930 median for October 2005.  The October 2006 median price decreased 1.5 percent compared with September’s revised $556,920 median price.

The median number of days it took to sell a single-family home was 57 days in October 2006, compared with 34 days (revised) for the same period a year ago.

The percentage of first-time buyers in California able to afford a median-priced home stood at 24 percent in the third quarter of 2006, compared with 28 percent for the same period a year ago.

The minimum household income first-time buyers needed to purchase a home at $478,710 in California in the third quarter of 2006 was $98,890, based on an adjustable interest rate of 6.58 percent and assuming a 10 percent down payment.  First-time buyers typically purchase a home equal to 85 percent of the prevailing median price.  The monthly payment including taxes and insurance was $3,300 for the third quarter of 2006.

At 39 percent, the High Desert region was the most affordable C.A.R. region in the state.

The NATIONAL ASSOCIATION OF REALTORS® has launched a national advertising campaign to urge potential home buyers who have been waiting on the sidelines to act now before prices gain traction. The campaign includes full-page newspaper ads running in six of the nation’s leading newspapers.

The advertisement points out:

q       Interest rates have fallen seven months in a row and are near 40- year lows.

q       Inventories of existing homes are higher than they have been in decades.

q       Home prices have stabilized.

“Homeownership is a safe, secure way to build long-term wealth, “the ad reads.  “The national median price of homes bought 10 years ago has increased 88 percent.  The number of U.S. households is expected to increase 15 percent during the next decade, creating a continued high demand for housing.”

• Safety Tip of the Week: Question why someone wants your personal information.  Whenever you are asked for personal information that seems inappropriate, question the source.  Ask how the information will be used and if it will be shared.  Ask how it will be protected.  Explain that you are concerned about identity theft. If you are not satisfied with the answers, consider going somewhere else.