Rising home values in Sacramento and throughout California have been a welcome sign of recovery from the recession-fueled real estate meltdown, but there is another side to that coin.

Despite the lure of low interest rates, rising home prices reduced housing affordability in California in the last quarter of 2012, the California Association of Realtors said Monday.

The percentage of homebuyers who could afford to purchase a median-priced, existing, single-family home in the state decreased to 48 percent at the close of last year, down from 55 percent in the final quarter of 2011.

CAR's "Traditional Housing Affordability Index" said homebuyers needed to earn a minimum annual income of $66,940 to qualify for the purchase of a $353,190 home in last year's fourth quarter.

The monthly payment, including taxes and insurance on a 30-year fixed-rate loan, would be $1,670, assuming a 20 percent down payment and an effective composite interest rate of 3.49 percent, CAR said.

However, the outlook was much brighter in the Sacramento area, with 71 percent of prospective buyers able to purchase a median-priced home at the end of 2012, down from 74 percent a year ago.

By comparison, only 22 percent of San Francisco area buyers could afford a median-priced home, down from 26 percent in the year-ago period.

Regional housing experts characterized CAR's report as mostly positive and pointed out that fourth-quarter 2012 sales involved fewer sales of bank-owned properties and fewer instances of cheap real estate being snapped up by investors.

Experts also stressed that low housing inventory and high demand are pushing prices higher.

"If you're a buyer, it's certainly a significant challenge right now," said Kris Vogt, president of the Coldwell Banker Residential Brokerage's Sacramento-Tahoe regional office. "Low inventory is the driver."

Chris Little, president of the Sacramento Association of Realtors, said rising home prices are "clearly a supply-and-demand issue. There's significant demand for homes. The supply is shockingly low."

Vogt said local high-growth markets - Elk Grove and Lincoln, to name two - that were seeing strong activity in 2005, before the housing meltdown, are expected to see appreciation after values were "crushed" during the recession.

In the Sacramento area, the fourth-quarter 2012 median was $193,190, which CAR's affordability formula equated to a monthly payment of $920, with a minimum annual income of $36,610 to qualify as affordable. That compares to a median price of $164,430 a year earlier.

CAR said Placer County, with a median home price of $302,630 in the fourth quarter of 2012, came in at 64 percent affordability, compared with 67 percent affordability in the final quarter of 2011.

Even though the Sacramento market remains a relative bargain, many prospective homebuyers - burned by the housing market meltdown - are still renting. The four-county Sacramento region added about 40,000 renter-occupied homes from 2006 to 2011, as investors snapped up previously owner-occupied homes. The home ownership rate dropped from 63.8 percent to 59.8 percent, according to the U.S. Census Bureau.

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