Higher home prices and economic recession dampen California housing affordability in second-quarter 2020, C.A.R. reports

- Thirty-three percent of California households could afford to purchase the $610,850 median-priced home in the second quarter of 2020, down from 35 percent in first-quarter 2020 but up from 30 percent a year ago.

- A minimum annual income of $115,200 was needed to make monthly payments of $2,880, including principal, interest and taxes on a 30-year fixed-rate mortgage at a 3.43 percent interest rate.

- Forty-four percent of home buyers were able to purchase the $480,000 median-priced condo or townhome. An annual income of $90,400 was required to make a monthly payment of $2,260.

News provided by

CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.)

Aug 12, 2020, 16:08 ET

LOS ANGELES, Aug. 12, 2020 /PRNewswire/ -- Higher home prices and lower household income caused by the economic recession dampened California housing affordability in the second quarter of 2020, 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 2020 dipped to 33 percent from 35 percent in the first quarter of 2020 but was up from 30 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 $115,200 was needed to qualify for the purchase of a $610,850 statewide median-priced, existing single-family home in the second quarter of 2020. The monthly payment, including taxes and insurance on a 30-year, fixed-rate loan, would be $2,880, assuming a 20 percent down payment and an effective composite interest rate of 3.43 percent. The effective composite interest rate was 3.70 percent in first-quarter 2020 and 4.17 percent in second-quarter 2019.

Housing affordability for condominiums and townhomes was unchanged from first-quarter 2020, with 44 percent of California households earning the minimum income to qualify for the purchase of a $480,000 median-priced condominium/townhome. An annual income of $90,400 was required to make monthly payments of $2,260. Forty percent of households could afford to buy a median-priced condominium/townhome a year ago.

Compared with California, more than half of the nation's households (57 percent) could afford to purchase a $291,300 median-priced home, which required a minimum annual income of $54,800 to make monthly payments of $1,370.

Key points from the second-quarter 2020 Housing Affordability report include:

When compared to a year ago, housing affordability improved in 44 tracked counties and declined in one county. Affordability remained flat in four counties.
In the San Francisco Bay Area, affordability improved from second-quarter 2019 in every county, except Solano, which was unchanged. San Mateo and San Francisco counties were the least affordable, tied at 19 percent of households able to purchase the median-priced home. Forty-six percent of Solano County households could afford the $485,000 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 (25 percent) and San Bernardino County being the most affordable (54 percent).
In the Central Valley region, eight counties experienced an improvement in affordability from a year ago, and three counties stayed flat, San Benito County (39 percent) was the least affordable and Kings County (60 percent) was the most affordable.
Housing affordability improved in all four counties in the Central Coast region.
During the second quarter of 2020, the most affordable counties in California were Lassen (68 percent), Kings (60 percent), San Bernardino (54 percent), Siskiyou (54 percent), Tehama (54 percent), and Tuolumne (54 percent). The minimum qualifying income was $61,200 or less for each of these counties.
Mono (17 percent), San Francisco (19 percent), and San Mateo (19 percent) were the least affordable counties in the state. Both San Mateo and San Francisco had a minimum qualifying income of over $320,000 to purchase a median-priced home in second-quarter 2020; San Francisco County required the highest income of all counties in California at $322,000.

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 2020

STATE/REGION/COUNTY	Q22020	Q12020	Q22019	Median Home Price	Monthly Payment Including Taxes & Insurance	Minimum Qualifying Income
Calif. Single-family home	33	35	30	$610,850	$2,880	$115,200
Calif. Condo/Townhome	44	44	40	$480,000	$2,260	$90,400
Los Angeles Metro Area	36	35	32	$548,000	$2,580	$103,200
Inland Empire	46	46	42	$400,000	$1,880	$75,200
San Francisco Bay Area	28	31	24	$989,000	$4,660	$186,400
United States	57	59	55	$291,300	$1,370	$54,800

San Francisco Bay Area
Alameda	26	28	23	$990,000	$4,660	$186,400
Contra Costa	37	42	35	$725,000	$3,410	$136,400
Marin	22	23	21	$1,460,000	$6,880	$275,200
Napa	33	34	28	$720,000	$3,390	$135,600
San Francisco	19	20	17	$1,710,000	$8,050	$322,000
San Mateo	19	20	18	$1,700,000	$8,010	$320,400
Santa Clara	22	22	20	$1,380,000	$6,500	$260,000
Solano	46	49	46	$485,000	$2,280	$91,200
Sonoma	31	32	28	$679,900	$3,200	$128,000
Southern California
Los Angeles	32	31	29	$581,650	$2,740	$109,600
Orange	25	24	24	$859,000	$4,050	$162,000
Riverside	43	44	39	$440,000	$2,070	$82,800
San Bernardino	54	53	50	$324,000	$1,530	$61,200
San Diego	30	30	27	$670,000	$3,160	$126,400
Ventura	31	32	30	$690,000	$3,250	$130,000
Central Coast
Monterey	25	26	24	$680,000	$3,200	$128,000
San Luis Obispo	31	31	25	$625,000	$2,940	$117,600
Santa Barbara	31	27	20	$645,000	$3,040	$121,600
Santa Cruz	23	23	17	$905,000	$4,260	$170,400
Central Valley
Fresno	51	52	48	$300,000	$1,410	$56,400
Glenn	46	46	NA	$304,250	$1,430	$57,200
Kern	50	52	50	$271,990	$1,280	$51,200
Kings	60	61	55	$260,000	$1,220	$48,800
Madera	51	52	51	$300,000	$1,410	$56,400
Merced	48	48	47	$285,000	$1,340	$53,600
Placer	45	46	45	$515,000	$2,430	$97,200
Sacramento	46	47	44	$405,000	$1,910	$76,400
San Benito	39	42	35	$600,000	$2,830	$113,200
San Joaquin	45	46	44	$409,000	$1,930	$77,200
Stanislaus	49	51	48	$352,000	$1,660	$66,400
Tulare	52	53	50	$259,580	$1,220	$48,800
Other Calif. Counties
Amador	53	53	46	$335,000	$1,580	$63,200
Butte	38	41	35	$379,880	$1,790	$71,600
Calaveras	49	48	46	$349,000	$1,640	$65,600
Del Norte	43	50	NA	$282,450	$1,330	$53,200
El Dorado	44	47	40	$515,000	$2,430	$97,200
Humboldt	43	43	37	$322,500	$1,520	$60,800
Lake	47	52	44	$302,500	$1,420	$56,800
Lassen	68	64	63	$199,500	$940	$37,600
Mariposa	43	46	45	$349,500	$1,650	$66,000
Mendocino	38	36	29	$410,000	$1,930	$77,200
Mono	17	17	15	$718,750	$3,380	$135,200
Nevada	45	46	40	$433,750	$2,040	$81,600
Plumas	52	48	37	$289,850	$1,370	$54,800
Shasta	52	52	47	$295,000	$1,390	$55,600
Siskiyou	54	52	49	$230,000	$1,080	$43,200
Sutter	50	50	46	$325,000	$1,530	$61,200
Tehama	54	49	47	$238,500	$1,120	$44,800
Tuolumne	54	54	48	$304,000	$1,430	$57,200
Yolo	43	43	40	$457,000	$2,150	$86,000
Yuba	52	53	46	$324,950	$1,530	$61,200