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Families Need $72,000 a Year for Orange County Housing

The average family needs at least $72,095 in household income to afford a starter home in Orange County, according to reports from the California Association of Realtors (CAR) based on data from the last quarter of 2009.

This makes Orange County housing 40% more affordable than it was in 2006, notably before the housing market crash. At this time, a family needed an income of $120,000 a year to be able to afford a starter home.

The affordability standard is based on families able to pay 85% of the median price with a 10% down payment. The same report showed that 53% of Orange County households currently meet the minimum, down from 56% at the start of the year.

On average, first-time home buyers would spend 40% of their income on monthly payments, including utilities and homeowners’ association dues. Including taxes, this amounts to an average of $1,919 per month.

The median price, which refers to the point between the highest and lowest prices, was pegged at $420,858 at the end of 2009. This is slightly lower than the overall yearly average of $436,000.

Throughout California, the minimum income needed by first-time home buyers was $44,100, with average monthly costs of $1,470. About 64% of California families are currently making enough to meet the standard.

Since 2000, the highest affordability rate in Orange County was seen in 2004—the same year where employment was at its most stable. Toward the end of this year, 69% of O.C. households met the minimum income for entry-level homes.