California housing affordability edges up from third quarter; slips from year ago, C.A.R. reports

Sixteen regions see improvements, with Contra Costa, Los Angeles, Alameda, Sonoma, and San Joaquin counties leading the way

Feb 11, 2016, 10:00 ET from CALIFORNIA ASSOCIATION OF REALTORS

LOS ANGELES, Feb. 11, 2016 /PRNewswire-USNewswire/ -- Lower interest rates and level home prices combined to perk up California housing affordability in the fourth quarter of 2015, compared to the previous quarter, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today. Affordability, however, was down when compared to the previous year.

The percentage of home buyers who could afford to purchase a median-priced, existing single-family home in California in fourth-quarter 2015 ticked up to 30 percent from the 29 percent recorded in the third quarter of 2015 but was down from 31 percent in fourth-quarter 2014, according to C.A.R.'s Traditional Housing Affordability Index (HAI). This is the 11th consecutive quarter that the index has been below 40 percent and is near the mid-2008 low level of 29 percent.  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 home buyers in the state.

Home buyers needed to earn a minimum annual income of $96,640 to qualify for the purchase of a $483,050 statewide median-priced, existing single-family home in the fourth quarter of 2015. The monthly payment, including taxes and insurance on a 30-year, fixed-rate loan, would be $2,420, assuming a 20 percent down payment and an effective composite interest rate of 4.07 percent. The effective composite interest rate in third-quarter 2015 was 4.16 percent and 4.20 percent in the fourth quarter of 2014.

The median home price was $488,540 in third-quarter 2015, and an annual income of $98,580 was needed to purchase a home at that price.

Unchanged from the previous quarter and year, 39 percent of California households earned the minimum income to qualify for the purchase of a condominium or townhome in the last quarter of 2015. An annual income of $78,720 was required to make monthly payments of $1,970.

Key points from the fourth-quarter 2015 Housing Affordability report include:

  • Compared to affordability in third-quarter 2015, 16 counties saw an improvement in housing affordability, five experienced declines, and six were unchanged.
  • Regionally, affordability improved slightly across the state with affordability gains mostly in the higher-priced areas, while less expensive regions experienced minimal effects due to level home prices.
  • Alameda, Contra Costa, Sonoma, Los Angeles, and San Joaquin counties saw the greatest quarter-to-quarter improvement in housing affordability due to flat home prices and lower interest rates.
  • During the fourth quarter of 2015, the five most affordable counties in California were Kings (61 percent), Merced (55 percent), San Bernardino (53 percent), Tulare (54 percent), and Fresno (49 percent).
  • San Francisco (11 percent), San Mateo (14 percent), and Marin (17 percent) counties were the least affordable areas of the state.

Housing Affordability slides (click link to open)

Affordability peak versus current*
Annual income peak versus current*
PITI peak versus current*

CALIFORNIA ASSOCIATION OF REALTORS®
Traditional Housing Affordability Index


C.A.R. Region

Housing
Affordability Index

Median Home
Price

Monthly Payment

Including Taxes

& Insurance

Minimum
Qualifying Income

Calif. Single-family home

30

$           483,050

$               2,420

$             96,640

Calif. Condo/Townhome

39

$           393,470

$               1,970

$             78,720

Los Angeles Metro Area

32

$           442,830

$               2,210

$             88,600

Inland Empire

45

$           295,550

$               1,480

$             59,130

San Francisco Bay Area

24

$           735,170

$               3,680

$           147,080

United States

58

$           222,700

$               1,110

$             44,550






San Francisco Bay Area





Alameda

22

$           728,160

$               3,640

$           145,680

Contra-Costa (Central County)

37

$           526,550

$               2,630

$           105,350

Marin

17

$       1,171,340

$               5,860

$           234,350

Napa

21

$           655,940

$               3,280

$           131,230

San Francisco

11

$       1,270,110

$               6,350

$           254,110

San Mateo

14

$       1,195,000

$               5,980

$           239,080

Santa Clara

20

$           940,000

$               4,700

$           188,060

Solano

45

$           355,900

$               1,780

$             71,200

Sonoma

26

$           551,340

$               2,760

$           110,300

Southern California





Los Angeles

27

$           481,940

$               2,410

$             96,420

Orange County

21

$           708,700

$               3,540

$           141,790

Riverside County

39

$           340,260

$               1,700

$             68,070

San Bernardino

53

$           233,730

$               1,170

$             46,760

San Diego

25

$           546,770

$               2,730

$           109,390

Ventura

26

$           608,430

$               3,040

$           121,730

Central Coast





Monterey

25

$           500,950

$               2,510

$           100,220

San Luis Obispo

26

$           541,990

$               2,710

$           108,430

Santa Barbara

23

$           607,880

$               3,040

$           121,620

Santa Cruz

21

$           720,000

$               3,600

$           144,050

Central Valley





Fresno

49

$           219,960

$               1,100

$             44,010

Kings County

61

$           190,970

$                   960

$             38,210

Madera

48

$           220,830

$               1,100

$             44,180

Merced

55

$           205,190

$               1,030

$             41,050

Placer County

44

$           394,770

$               1,970

$             78,980

Sacramento

46

$           294,050

$               1,470

$             58,830

San Joaquin

38

$           284,820

$               1,420

$             56,980

Stanislaus

40

$           253,320

$               1,270

$             50,680

Tulare

54

$           189,300

$                   950

$             37,870

 

CALIFORNIA ASSOCIATION OF REALTORS®
Traditional Housing Affordability Index


STATE/REGION/COUNTY

Q4 2015

Q3 2015


Q4 2014


Calif. Single-family home

30

29


31


Calif. Condo/Townhome

39

39

r

39


Los Angeles Metro Area

32

31


34


Inland Empire

45

45


47


San Francisco Bay Area

24

22

r

21


United States

58

56


59








San Francisco Bay Area






Alameda

22

20


20


Contra-Costa

37

34

r

40

r

Marin

17

19


15


Napa

21

21


24


San Francisco

11

10


11

r

San Mateo

14

13


15


Santa Clara

20

19


22


Solano

45

44


50


Sonoma

26

24


29


Southern California






Los Angeles

27

24


28


Orange County

21

20


21


Riverside County

39

39


41


San Bernardino

53

54


57


San Diego

25

24


27


Ventura

26

25


29


Central Coast






Monterey

25

27


27


San Luis Obispo

26

27


26


Santa Barbara

23

18


21


Santa Cruz

21

19


17


Central Valley






Fresno

49

49


53


Kings County

61

60


64


Madera

48

49


50

r

Merced

55

55


53


Placer County

44

44


45


Sacramento

46

46


49


San Joaquin

38

36


41

r

Stanislaus

40

40


44

r

Tulare

54

53


56


r = revised

 

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 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States with 185,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

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SOURCE CALIFORNIA ASSOCIATION OF REALTORS



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