BUYING HOMES ELUSIVE FOR MOST 17% CAN AFFORD TO BUY IN L.A.

Byline: Gregory J. Wilcox Staff Writer

Housing affordability in California and Los Angeles County fell an annual six percentage points in November but remained unchanged for the third consecutive month, a trade group said Thursday.

Two months ago, 19 percent of the state's households could afford to buy a home priced at the median of $473,260, said the California Association of Realtors. In November 2003, 25 percent of the households could afford a home priced at the median $384,470.

Los Angeles County's affordability index remained at 17 percent in November, when the median price was $474,570. But a year earlier, 23 percent of households could afford a median-price home costing $382,190.

Gov. Arnold Schwarzenegger, in a meeting with Daily News editors and reporters, said that solving the affordable housing problem will take a collaborative effort.

``It's extremely important we create a good relationship with local governments, not to just build malls, but affordable housing. We've got to work together,'' said Schwarzenegger.

A supply of affordable housing is also crucial to attract new business to the state, the governor said.

Leslie Appleton-Young, the association's vice president and chief economist, said house hunters caught a break with affordability flat-lined for three consecutive months, but she expects it to continue trending down this year.

Prices have not made huge moves over the past three months and interest rates are slightly lower than a year ago.

``I do think we're at a real crisis point, not for existing owners or trade-up buyers, but for first-time buyers,'' she said.

The report also showed that:

--The High Desert, which includes the Antelope Valley, remains the most affordable area in the state. In November, 40 percent of households could afford a home priced at the median $248,320. But affordability plunged an annual 17 percent points and two percentage points monthly.

--In Ventura County, affordability sank 8 percentage points annually as 17 percent of households could afford a home priced at the median $595,910.

--The minimum household income needed to purchase a median-price home in November was $109,670, based on an average effective mortgage interest rate of 5.70 percent, and assuming a 20 percent down payment. A year earlier the income requirement was $90,270 , the median price was $384,470 and the prevailing interest rate was 5.85 percent.

Separately, Marcus & Millichap Real Estate Investment Brokerage Co. issued a forecast for this year that has rents rising across the region, a direct response to low home affordability. The company expects tighter vacancies and the growing renter pool will drive rates up 5 percent this year to average $1,280 per month in Los Angeles County. It includes all types of rental stock.

Gregory J. Wilcox, [phone]

greg.wilcox(at)dailynews.com