California housing affordability dips in second quarter 2019, C.A.R. reports

- Thirty percent of California households could afford to purchase the $608,660 median-priced home in the second quarter of 2019, down from 32 percent in first-quarter 2019 but up from 26 percent a year ago.

- A minimum annual income of $122,960 was needed to make monthly payments of $3,070, including principal, interest and taxes on a 30-year fixed-rate mortgage at a 4.17 percent interest rate.

- Forty percent of home buyers were able to purchase the $475,000 median-priced condo or townhome. An annual income of $95,960 was required to make a monthly payment of $2,400.

News provided by

CALIFORNIA ASSOCIATION OF REALTORS

Aug 07, 2019, 10:00 ET

LOS ANGELES, Aug. 7, 2019 /PRNewswire/ -- Higher home prices negated the lowest interest rates in more than a year and reduced Californians' ability to afford a home purchase in the second quarter of 2019, the CALIFORNIA ASSOCIATION OF REALTORS^® (C.A.R.) said today.

The percentage of home buyers who could afford to purchase a median-priced, existing single-family home in California in second-quarter 2019 dipped to 30 percent from 32 percent in the first quarter of 2019 but was up from 26 percent in the second quarter a year ago, according to C.A.R.'s Traditional Housing Affordability Index (HAI). California's housing affordability index hit a peak of 56 percent in the second quarter of 2012.

C.A.R.'s HAI measures the percentage of all households that can afford to purchase a median-priced, single-family home in California. C.A.R. also reports affordability indices for regions and select counties within the state. The index is considered the most fundamental measure of housing well-being for home buyers in the state.

A minimum annual income of $122,960 was needed to qualify for the purchase of a $608,660 statewide median-priced, existing single-family home in the second quarter of 2019. The monthly payment, including taxes and insurance on a 30-year, fixed-rate loan, would be $3,070, assuming a 20 percent down payment and an effective composite interest rate of 4.17 percent. The effective composite interest rate was 4.62 percent in first-quarter 2019 and 4.70 percent in second-quarter 2018.

Housing affordability for condominiums and townhomes also slipped in first-quarter 2019 compared to the previous quarter, with 40 percent of California households earning the minimum income to qualify for the purchase of a $475,000 median-priced condominium/townhome, down from 41 percent in the previous quarter. An annual income of $95,960 was required to make monthly payments of $2,400. Thirty-six percent of households could afford to buy a condominium/townhome a year ago.

Compared with California, more than half of the nation's households (55 percent) could afford to purchase a $279,600 median-priced home, which required a minimum annual income of $56,480 to make monthly payments of $1,410.

Key points from the second-quarter 2019 Housing Affordability report include:

When compared to a year ago, housing affordability improved in 42 tracked counties and declined in five counties. Affordability remained flat in one county.
In the San Francisco Bay Area, affordability improved from second-quarter 2018 in every county. San Francisco County was the least affordable, with just 17 percent of households able to purchase the $1,700,000 median-priced home. Forty-six percent of Solano County households could afford the $445,000 median-priced home, making it the most affordable Bay Area county.
Affordability also improved in all Southern California regions, with Orange County being the least affordable (24 percent) and San Bernardino County being the most affordable (50 percent).
In the Central Valley region, only Kern County experienced a decline in affordability from a year ago, decreasing from 53 percent in second-quarter 2018 to 50 percent in second-quarter 2019. San Benito County (35 percent) was the least affordable and Kings County (55 percent) was the most affordable.
Housing affordability improved in three counties in the Central Coast region — Monterey, San Luis Obispo and Santa Cruz — and was unchanged in one, Santa Barbara.
During the second quarter of 2019, the most affordable counties in California were Lassen (63 percent), Kings (55 percent) and Madera (51 percent). The minimum annual income needed to qualify for a home in these counties was less than $60,000.
Mono (15 percent), San Francisco (17 percent), Santa Cruz (17 percent) and San Mateo (18 percent) counties were the least affordable areas in the state. San Francisco and San Mateo counties required the highest minimum qualifying incomes in the state. An annual income of $343,420 was needed to purchase a home in San Francisco County, and an annual income of $338,870 was required in San Mateo County.

See C.A.R.'s historical housing affordability data.
See first-time buyer housing affordability data.

Leading the way…^® in California real estate for more than 110 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States with more than 200,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

CALIFORNIA ASSOCIATION OF REALTORS^® Traditional Housing Affordability Index Second quarter 2019

STATE/REGION/COUNTY	2^nd Qtr. 2019	1^st Qtr. 2019	2^nd Qtr. 2018	Median Home Price	Monthly Payment Including Taxes & Insurance	Minimum Qualifying Income
Calif. Single-family home	30	32	26	$608,660	$3,070	$122,960
Calif. Condo/Townhome	40	41	36	$475,000	$2,400	$95,960
Los Angeles Metro Area	32	33	29	$540,000	$2,730	$109,090
Inland Empire	42	42	41	$380,000	$1,920	$76,760
San Francisco Bay Area	24	26	18	$980,000	$4,950	$197,970
United States	55	57	53	$279,600	$1,410	$56,480

San Francisco Bay Area
Alameda	23	25	16	$950,000	$4,800	$191,910
Contra Costa	35	37	29	$690,000	$3,480	$139,390
Marin	21	21	18	$1,381,250	$6,980	$279,030
Napa	28	29	25	$710,000	$3,590	$143,430
San Francisco	17	17	14	$1,700,000	$8,580	$343,420
San Mateo	18	18	14	$1,677,500	$8,470	$338,870
Santa Clara	20	20	16	$1,330,000	$6,720	$268,680
Solano	46	46	38	$445,000	$2,250	$89,900
Sonoma	28	27	20	$660,000	$3,330	$133,330
Southern California
Los Angeles	29	28	26	$567,010	$2,860	$114,540
Orange	24	24	20	$835,000	$4,220	$168,680
Riverside	39	39	37	$420,000	$2,120	$84,840
San Bernardino	50	50	49	$310,000	$1,570	$62,620
San Diego	27	27	23	$655,000	$3,310	$132,320
Ventura	30	29	28	$650,000	$3,280	$131,300
Central Coast
Monterey	24	25	19	$630,000	$3,180	$127,270
San Luis Obispo	25	26	22	$640,000	$3,230	$129,290
Santa Barbara	20	25	20	$724,500	$3,660	$146,360
Santa Cruz	17	17	12	$937,500	$4,740	$189,390
Central Valley
Fresno	48	48	46	$279,920	$1,410	$56,550
Kern	50	50	53	$255,000	$1,290	$51,510
Kings	55	57	50	$250,000	$1,260	$50,500
Madera	51	52	48	$277,000	$1,400	$55,960
Merced	47	46	42	$282,000	$1,420	$56,970
Placer	45	46	41	$514,950	$2,600	$104,030
Sacramento	44	44	41	$385,000	$1,940	$77,770
San Benito	35	31	30	$571,500	$2,880	$115,330
San Joaquin	44	43	38	$380,000	$1,920	$76,760
Stanislaus	48	47	45	$325,250	$1,640	$65,700
Tulare	50	51	48	$247,500	$1,250	$50,000
Other Calif. Counties
Amador	NA	NA	44	NA	NA	NA
Butte	35	34	38	$370,000	$1,870	$74,740
Calaveras	46	47	43	$343,000	$1,730	$69,290
El Dorado	40	40	38	$519,500	$2,620	$104,940
Humboldt	37	36	33	$320,000	$1,610	$64,570
Lake	44	44	37	$267,000	$1,350	$53,820
Lassen	63	63	64	$204,000	$1,030	$41,080
Mariposa	45	41	39	$300,000	$1,510	$60,350
Mendocino	29	28	22	$400,000	$2,010	$80,380
Mono	15	10	14	$699,500	$3,510	$140,410
Nevada	40	40	32	$419,000	$2,100	$84,020
Plumas	37	48	42	$367,390	$1,840	$73,600
Shasta	47	44	46	$281,000	$1,410	$56,230
Siskiyou	49	53	48	$232,500	$1,160	$46,480
Sutter	46	46	45	$312,500	$1,560	$62,400
Tehama	47	43	51	$244,000	$1,220	$48,680
Tuolumne	48	45	43	$300,000	$1,490	$59,790
Yolo	40	39	33	$455,000	$2,260	$90,590
Yuba	46	46	45	$305,000	$1,520	$60,660