California's Housing Affordability Level At 16-Year Low

WRE News August 17, 2023

Buyer

California's Housing Affordability Level At 16-Year Low

Housing affordability in California sank to its lowest level in nearly 16 years, according to new data from the California Association of Realtors (CAR).

Less than one in five (16%) home buyers could afford to purchase a median-priced, existing single-family home in California in the second quarter, down 19% in the first quarter and down from 17% in the second quarter of 2022. CAR noted the second quarter’s level was less than one-third of its affordability index peak high of 56% in the first quarter of 2012.

CAR also observed that state residents needed to earn a minimum annual income of $208,000 in order to qualify for the purchase of a $830,620 statewide median-priced, existing single-family home in the second quarter. The monthly payment, including taxes and insurance on a 30-year, fixed-rate loan, would be $5,200, assuming a 20% down payment and an effective composite interest rate of 6.61%.

However, a median-priced condominium or townhome in California was $640,000 in the second quarter, and CAR estimated 26% of residents could afford a typical housing unit in this sector if they had an annual income of $160,400 and could make the average monthly payment of $4,010.

Lassen County required the lowest minimum qualifying income ($62,400) of all counties in California to purchase a median-priced home and was the only county in the state with a qualifying income of less than $65,000.


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