HOMES REMAIN OUT OF REACH COUNTY AFFORDABILITY HITS A RECORD LOW.

Byline: Gregory J. Wilcox Staff Writer

Housing affordability fell to a record low in Los Angeles County during July and remained near that level in California as prices hit all-time highs in many areas, a trade group said Thursday.

Two months ago, just 14 percent of county households could afford a home priced at the median $543,890, said the Los Angeles-based California Association of Realtors. A household would need to earn at least $126,370 to qualify for a traditional 30-year fixed rate loan.

Locally, affordability fell 3 percentage points from a year ago and 1 percentage point from June. The county's prior record low affordability was 15 percent, first reached in June and July of 1989, and tied this May and June.

Statewide affordability also declined 3 percentage points from a year ago but remained unchanged from June. The record low statewide is 14 percent in May, June and July of 1989.

The association's Housing Affordability Index measures the percentage of households that can afford the median-price home in California and in selected communities across the state.

And even though affordability is low, sales statewide and in the county are on a record pace. That's because interest rates remain low and lenders have developed creative ways of helping consumers buy in an expensive market.

``We know that all these alternative loan products are allowing households to stretch themselves financially and be able to qualify for a home,'' said Robert Kleinhenz, the association's deputy chief economist.

``And who would have expected that in 2005 interest rates would not be higher than they were in 2004?''

California and county households must earn more than twice the national average income to qualify for a home loan.

To buy a home priced at the statewide median of $540,900 in July, a household needed to earn a minimum $125,670. This example assumes a 20 percent down payment and interest rate of 5.73 percent.

A year ago the minimum income requirement was $109,170, the interest rate was 5.93 percent and the median price was $461,760.

By comparison, the nationwide median price in July was $218,000 and the minimum qualifying income to buy it was $50,650.

The report also showed that:

--Once again the High Desert, which includes the Antelope Valley, is the state's most affordable area, with a home purchase within range of 30 percent of the households. The median price there was $298,950, but affordability plunged an annual 12 percentage points.

--Affordability in Ventura County, where the median price was $694,690, remained at 13 percent, unchanged from June and down 1 percentage point from a year ago.

--In the Inland Empire, affordability was 15 percent, down a point from June and 3 points from a year ago. The median price was $384,910.

Market analyst Nima Nattagh said that these low affordability levels should start impacting prices.

``I think we've entered into a phase where prices will be stable for at least the foreseeable future,'' he said.

That might not be the case for the hot San Fernando Valley market, which saw the median price hit a record $600,000 in July.

Preliminary numbers for August indicate another price record is likely. Last month four communities - Calabasas, Tarzana, Toluca Lake and Studio City - had a median of $1 million or more and half of the 36 ZIP codes monitored by the Southland Regional Association of Realtors had a median price of $600,000 or higher.

Gregory J. Wilcox, [phone]

greg.wilcox(at)dailynews.com