California housing affordability drops to lowest level in 10 years, C.A.R. reports
- Twenty-eight percent of California households could afford to purchase the $555,680 median-priced home in the third quarter of 2017, down from 29 percent in second-quarter 2017 and down from 31 percent in third-quarter 2016.
- A minimum annual income of $112,100 was needed to make monthly payments of $2,800, including principal, interest, and taxes on a 30-year fixed-rate mortgage at a 4.16 percent interest rate.
- Thirty-eight percent of home buyers were able to purchase the $440,000 median-priced condo or townhome. An annual income of $88,770 was required to make a monthly payment of $2,220.
LOS ANGELES, Nov. 2, 2017 /PRNewswire-USNewswire/ -- California's housing affordability hit a 10-year low as tight housing inventory drove home prices higher and reduced purchasing power for homebuyers in the third quarter, primarily in previously more affordable regions such as the Inland Empire and Central Valley, 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 third-quarter 2017 fell to 28 percent, down from 29 percent in the second quarter of 2017 and down from 31 percent in the third quarter a year ago, according to C.A.R.'s Traditional Housing Affordability Index (HAI). This is the 18th consecutive quarter that the index has been below 40 percent and the lowest since third-quarter 2015. California's housing affordability index hit a peak of 56 percent in the first 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 homebuyers in the state.
A minimum annual income of $112,100 was needed to qualify for the purchase of a $555,680 statewide median-priced, existing single-family home in the third quarter of 2017. The monthly payment, including taxes and insurance on a 30-year, fixed-rate loan, would be $2,800, assuming a 20 percent down payment and an effective composite interest rate of 4.16 percent. The effective composite interest rate in second-quarter 2017 was 4.09 percent and 3.76 percent in the third quarter of 2016.
Of particular note, housing affordability in Los Angeles County dropped 6 points from an index of 28 in the second quarter to an index of 22 in the third quarter as the area's median home price jumped $81,000 in one quarter to reach nearly $600,000. Meanwhile, affordability improved in the Bay Area as prices leveled off from peaks across the region, most notably an $80,000 decline in San Francisco and a $77,500 decrease in Marin.
The affordability of condominiums and townhomes dipped in third-quarter 2017 compared to the previous quarter with 38 percent of California households earning the minimum income to qualify for the purchase of a $440,000 median-priced condominium/townhome, down from 39 in the second quarter. An annual income of $88,770 was required to make monthly payments of $2,220. Thirty-eight percent of households could afford to purchase the $443,400 priced condo or townhome in second-quarter 2017.
Key points from the third-quarter 2017 Housing Affordability report include:
- Compared to second-quarter 2017, housing affordability generally declined in Southern California and the Central Valley, but improved slightly across the Bay Area. Affordability improved in 15 of 43 tracked counties (Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo, Monterey, Santa Barbara, Placer, Amador, Butte, El Dorado, Mendocino, Shasta, and Siskiyou).
- Eighteen counties experienced a decline in housing affordability (Solano, Los Angeles, Riverside, San Luis Obispo, Fresno, Kern, Madera, Merced, Sacramento, San Benito, San Joaquin, Stanislaus, Tulare, Humboldt, Mariposa/Tuolumne, Sutter, Tehama, and Yolo).
- Housing affordability was unchanged in 10 counties (Santa Clara, Sonoma, Orange County, San Bernardino, San Diego, Ventura, Santa Cruz, Kings, Lake, and Yuba).
- During the third quarter of 2017, the most affordable counties in California were Tehama (56 percent), Kern (53 percent), and Kings, (52 percent).
- San Francisco (13 percent), San Mateo (15 percent), Santa Clara and Santa Cruz (both at 17 percent), and Marin (18 percent) counties were the least affordable areas in the state.
Housing Affordability slides (click link to open)
Affordability peak versus current
Annual required income peak vs. current
PITI peak versus current
CA housing affordability by quarter (2006-2017)
Housing affordability by county
See C.A.R.'s historical housing affordability data.
See first-time buyer housing affordability data.
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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 than190,000 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 |
||||
| Third Quarter 2017 |
||||
| C.A.R. Region |
Housing Affordability |
Median Home Price |
Monthly Payment |
Minimum Qualifying Income |
| Calif. Single-family home |
28 |
$ 555,680 |
$ 2,800 |
$ 112,100 |
| Calif. Condo/Townhome |
38 |
$ 440,000 |
$ 2,220 |
$ 88,770 |
| Los Angeles Metro Area |
30 |
$ 502,000 |
$ 2,530 |
$ 101,270 |
| Inland Empire |
43 |
$ 339,900 |
$ 1,710 |
$ 68,570 |
| San Francisco Bay Area |
23 |
$ 860,000 |
$ 4,340 |
$ 173,500 |
| United States |
55 |
$ 254,000 |
$ 1,280 |
$ 51,240 |
| San Francisco Bay Area |
||||
| Alameda |
20 |
$ 865,000 |
$ 4,360 |
$ 174,500 |
| Contra-Costa |
33 |
$ 624,450 |
$ 3,150 |
$ 125,980 |
| Marin |
18 |
$ 1,225,000 |
$ 6,180 |
$ 247,130 |
| Napa |
26 |
$ 653,000 |
$ 3,290 |
$ 131,740 |
| San Francisco |
13 |
$ 1,370,000 |
$ 6,910 |
$ 276,380 |
| San Mateo |
15 |
$ 1,441,250 |
$ 7,270 |
$ 290,760 |
| Santa Clara |
17 |
$ 1,165,000 |
$ 5,880 |
$ 235,030 |
| Solano |
43 |
$ 415,750 |
$ 2,100 |
$ 83,870 |
| Sonoma |
25 |
$ 630,000 |
$ 3,180 |
$ 127,100 |
| Southern California |
||||
| Los Angeles |
22 |
$ 595,110 |
$ 3,000 |
$ 120,060 |
| Orange County |
21 |
$ 790,000 |
$ 3,980 |
$ 159,370 |
| Riverside County |
38 |
$ 387,000 |
$ 1,950 |
$ 78,070 |
| San Bernardino |
51 |
$ 270,000 |
$ 1,360 |
$ 54,470 |
| San Diego |
26 |
$ 607,000 |
$ 3,060 |
$ 122,460 |
| Ventura |
27 |
$ 634,000 |
$ 3,200 |
$ 127,900 |
| Central Coast |
||||
| Monterey |
22 |
$ 585,000 |
$ 2,950 |
$ 118,020 |
| San Luis Obispo |
23 |
$ 599,000 |
$ 3,020 |
$ 120,840 |
| Santa Barbara |
20 |
$ 664,540 |
$ 3,350 |
$ 134,060 |
| Santa Cruz |
17 |
$ 830,000 |
$ 4,190 |
$ 167,440 |
| Central Valley |
||||
| Fresno |
45 |
$ 259,900 |
$ 1,310 |
$ 52,430 |
| Kern (Bakersfield) |
53 |
$ 235,000 |
$ 1,190 |
$ 47,410 |
| Kings County |
52 |
$ 225,000 |
$ 1,130 |
$ 45,390 |
| Madera |
41 |
$ 280,000 |
$ 1,410 |
$ 56,490 |
| Merced |
47 |
$ 255,000 |
$ 1,290 |
$ 51,440 |
| Placer County |
44 |
$ 455,000 |
$ 2,290 |
$ 91,790 |
| Sacramento |
43 |
$ 350,000 |
$ 1,770 |
$ 70,610 |
| San Benito |
31 |
$ 550,000 |
$ 2,770 |
$ 110,960 |
| San Joaquin |
41 |
$ 352,250 |
$ 1,780 |
$ 71,060 |
| Stanislaus |
46 |
$ 295,000 |
$ 1,490 |
$ 59,510 |
| Tulare |
51 |
$ 225,000 |
$ 1,130 |
$ 45,390 |
| Other Calif. Counties |
||||
| Amador |
44 |
$ 320,000 |
$ 1,610 |
$ 64,560 |
| Butte County |
40 |
$ 299,900 |
$ 1,510 |
$ 60,500 |
| El Dorado County |
41 |
$ 462,750 |
$ 2,330 |
$ 93,350 |
| Humboldt |
33 |
$ 318,000 |
$ 1,600 |
$ 64,150 |
| Lake County |
38 |
$ 249,950 |
$ 1,260 |
$ 50,420 |
| Mariposa/Tuolumne |
45 |
$ 289,000 |
$ 1,460 |
$ 58,300 |
| Mendocino |
28 |
$ 391,000 |
$ 1,970 |
$ 78,880 |
| Shasta |
48 |
$ 250,000 |
$ 1,260 |
$ 50,430 |
| Siskiyou County |
49 |
$ 203,500 |
$ 1,030 |
$ 41,050 |
| Sutter |
51 |
$ 280,600 |
$ 1,420 |
$ 56,610 |
| Tehama |
56 |
$ 208,500 |
$ 1,050 |
$ 42,060 |
| Yolo |
34 |
$ 435,000 |
$ 2,190 |
$ 87,760 |
| Yuba |
43 |
$ 268,520 |
$ 1,350 |
$ 54,170 |
r = revised
| CALIFORNIA ASSOCIATION OF REALTORS® |
|||||
| Traditional Housing Affordability Index |
|||||
| Third Quarter 2017 |
|||||
| STATE/REGION/COUNTY |
Q3 2017 |
Q2 2017 |
Q3 2016 |
||
| Calif. Single-family home |
28 |
29 |
31 |
||
| Calif. Condo/Townhome |
38 |
39 |
r |
40 |
|
| Los Angeles Metro Area |
30 |
31 |
34 |
||
| Inland Empire |
43 |
43 |
47 |
r |
|
| San Francisco Bay Area |
23 |
21 |
27 |
r |
|
| United States |
55 |
55 |
57 |
||
| San Francisco Bay Area |
|||||
| Alameda |
20 |
19 |
24 |
r |
|
| Contra-Costa (Central County) |
33 |
31 |
37 |
r |
|
| Marin |
18 |
17 |
19 |
||
| Napa |
26 |
25 |
25 |
||
| San Francisco |
13 |
12 |
14 |
||
| San Mateo |
15 |
14 |
15 |
||
| Santa Clara |
17 |
17 |
22 |
||
| Solano |
43 |
44 |
45 |
||
| Sonoma |
25 |
25 |
27 |
||
| Southern California |
|||||
| Los Angeles |
22 |
28 |
26 |
||
| Orange County |
21 |
21 |
23 |
||
| Riverside County |
38 |
39 |
42 |
||
| San Bernardino |
51 |
51 |
55 |
||
| San Diego |
26 |
26 |
28 |
r |
|
| Ventura |
27 |
27 |
34 |
r |
|
| Central Coast |
|||||
| Monterey |
22 |
21 |
25 |
||
| San Luis Obispo |
23 |
26 |
27 |
r |
|
| Santa Barbara |
20 |
16 |
20 |
||
| Santa Cruz |
17 |
17 |
18 |
||
| Central Valley |
|||||
| Fresno |
45 |
47 |
50 |
||
| Kern (Bakersfield) |
53 |
54 |
56 |
||
| Kings County |
52 |
52 |
58 |
r |
|
| Madera |
41 |
44 |
48 |
r |
|
| Merced |
47 |
48 |
51 |
r |
|
| Placer County |
44 |
43 |
47 |
r |
|
| Sacramento |
43 |
45 |
46 |
r |
|
| San Benito |
31 |
33 |
34 |
||
| San Joaquin |
41 |
43 |
45 |
r |
|
| Stanislaus |
46 |
47 |
49 |
r |
|
| Tulare |
51 |
52 |
50 |
r |
|
| Other Calif. Counties |
|||||
| Amador |
44 |
42 |
53 |
||
| Butte County |
40 |
39 |
44 |
||
| El Dorado County |
41 |
40 |
40 |
||
| Humboldt |
33 |
36 |
40 |
||
| Lake County |
38 |
38 |
46 |
||
| Mariposa And Tuolumne |
45 |
46 |
50 |
||
| Mendocino |
28 |
27 |
33 |
||
| Shasta |
48 |
47 |
48 |
||
| Siskiyou County |
49 |
47 |
51 |
||
| Sutter |
51 |
53 |
51 |
||
| Tehama |
56 |
57 |
59 |
||
| Yolo |
34 |
35 |
36 |
||
| Yuba |
43 |
43 |
46 |
||
SOURCE CALIFORNIA ASSOCIATION OF REALTORS
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