Real Estate Blog

Housing affordability falling in Valley

Housing affordability levels in Fresno and Madera counties are falling as home prices and mortgage interest rates inch up.

Homebuyers in Fresno and Madera dedicated nearly 27% of their income to a monthly mortgage payment on a median-priced home in May, according to a second quarter affordability report from RealtyTrac, an online property data company.

That’s slightly lower than the 14-year average of 30% for both counties but growing, the report said. At the peak of the market, homeowners dedicated 50% of their income to their mortgages. When houses were cheap, the percentage fell to 19%, the report said.

The California Association of Realtors suggests buyers spend no more than 30% of their income on a monthly mortgage, said Michael Gilmore, branch manager for HomeBridge Financial Services, a mortgage lending company in Fresno.

“However in reality, there’s different measures,” Gilmore said. It depends on where the mortgage is coming from — whether it’s Fannie Mae or Freddie Mac and others — that have percentages ranging from 29% to 33%, he said.

At the end of the day, Gilmore said, affordability is tied to jobs and wages. Higher paying jobs would help, he said.