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First Qtr 2017 Housing Affordability report

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For release:
May 15, 2017

California housing affordability inches up as seasonal price declines and income growth offset higher interest rates

• Thirty-two percent of California households could afford to purchase the $496,620 median-priced home in the first quarter of 2017, up from 31 percent in fourth-quarter 2016 but down from 34 percent in first-quarter 2016.

• A minimum annual income of $102,050 was needed to make monthly payments of $2,550, including principal, interest, and taxes on a 30-year fixed-rate mortgage at a 4.36 percent interest rate.

• Forty percent of home buyers were able to purchase the $414,940 median-priced condo or townhome. An annual income of $85,270 was required to make a monthly payment of $2,130.

LOS ANGELES (May 15) – Despite a moderate increase in mortgage interest rates, seasonal price declines and higher household income elevated California’s housing affordability in first-quarter 2017, 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 first-quarter 2017 inched up to 32 percent, up from 31 percent in the fourth quarter of 2016 but was down from 34 percent in the first quarter a year ago, according to C.A.R.’s Traditional Housing Affordability Index (HAI). This is the 16th 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 fourth 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 $102,050 to qualify for the purchase of a $496,620 statewide median-priced, existing single-family home in the first quarter of 2017. The monthly payment, including taxes and insurance on a 30-year, fixed-rate loan, would be $2,550, assuming a 20 percent down payment and an effective composite interest rate of 4.36 percent. The effective composite interest rate in fourth-quarter 2016 was 3.91 percent and 4.01 percent in the first quarter of 2016. 

Homes were less affordable in first-quarter 2017 compared to first-quarter 2016, when the affordability index stood at 34 and the median home price was $465,280. An annual income of $92,570 was needed to make monthly payments of $2,310. 

The affordability of condominiums and townhomes also was flat in first-quarter 2017 compared to the previous quarter. Forty percent of California households earned the minimum income to qualify for the purchase of a $414,940 median-priced condominium or townhome in the first quarter of 2017, and an annual income of $85,270 was required to make monthly payments of $2,130.

Key points from the first-quarter 2017 Housing Affordability report include:

• Compared to affordability in fourth-quarter 2016, eight of 43 counties tracked posted an improvement in housing affordability (Los Angeles, San Diego, Merced, San Joaquin, Tulare, El Dorado, Shasta, and Sutter), 26 experienced a decline (Alameda, Contra Costa, Marin, Napa, Santa Clara, Sonoma, Orange County, Riverside, San Bernardino, Ventura, Monterey, San Luis Obispo, Santa Barbara, Fresno, Kings, Madera, Placer, San Benito, Amador, Humboldt, Lake, Mariposa/Tuolumne, Mendocino, Siskiyou, Tehama, Yuba), and nine were unchanged (San Francisco, San Mateo, Santa Clara, Santa Cruz, Kern, Sacramento, Stanislaus, Butte, and Yolo).

• During the first quarter of 2017, the most affordable counties in California were Tehama, Kern (both at 55 percent); Kings, Sutter (both at 53 percent); and Tulare, San Bernardino (both at 52 percent).

• San Francisco (13 percent), Santa Barbara (14 percent), and San Mateo (15 percent), counties were the least affordable areas in the state.  

• Housing affordability figures are now available for the following counties: Amador, Butte, El Dorado, Humboldt, Lake, Mariposa and Tuolumne (combined), Mendocino, San Benito, Shasta, Siskiyou, Sutter, Tehama, Yolo, and Yuba. See accompanying tables.

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.

 

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
First quarter 2017

C.A.R. Region Housing
Affordability Index
Median Home
Price
Monthly Payment Including Taxes & Insurance Minimum
Qualifying Income
CA SFH (SAAR) 32  $496,620   $2,550   $102,050 
CA Condo/Townhomes 40  $414,940   $2,130   $85,270 
Los Angeles Metropolitan Area 33  $461,920   $2,370   $94,920 
Inland Empire 43  $326,460   $1,680   $67,080 
S.F. Bay Area 25  $780,330   $4,010   $160,350 
United States 57  $232,100   $1,190   $47,690 
S.F. Bay Area
Alameda 21  $798,000   $4,100   $163,980 
Contra-Costa (Central County) 37  $562,500   $2,890   $115,590 
Marin 18  $1,200,000   $6,160   $246,590 
Napa 24  $668,000   $3,430   $137,270 
San Francisco 13  $1,300,000   $6,680   $267,130 
San Mateo 15  $1,300,000   $6,680   $267,130 
Santa Clara 19  $1,070,000   $5,500   $219,870 
Solano 45  $390,750   $2,010   $80,290 
Sonoma 25  $605,000   $3,110   $124,320 
Southern California
Los Angeles 29  $485,800   $2,500   $99,830 
Orange County 21  $750,000   $3,850   $154,120 
Riverside County 39  $365,000   $1,880   $75,000 
San Bernardino 52  $256,900   $1,320   $52,790 
San Diego 28  $564,000   $2,900   $115,900 
Ventura 25  $642,480   $3,300   $132,020 
Central Coast
Monterey 23  $560,000   $2,880   $115,070 
San Luis Obispo 26  $550,000   $2,830   $113,020 
Santa Barbara 14  $779,000   $4,000   $160,080 
Santa Cruz 17  $805,000   $4,140   $165,420 
Central Valley
Fresno 48  $238,000   $1,220   $48,910 
Kern (Bakersfield) 55  $219,000   $1,130   $45,000 
Kings County 53  $215,000   $1,100   $44,180 
Madera 47  $238,000   $1,220   $48,910 
Merced 50  $228,500   $1,170   $46,950 
Placer County 45  $435,000   $2,230   $89,390 
Sacramento 46  $319,720   $1,640   $65,700 
San Benito 32  $525,000   $2,700   $107,880 
San Joaquin 45  $315,000   $1,620   $64,730 
Stanislaus 48  $275,000   $1,410   $56,510 
Tulare 52  $212,000   $1,090   $43,560 
Other Calif. Counties
Amador 47  $295,000   $1,520   $60,620 
Butte County 41  $282,000   $1,450   $57,950 
El Dorado County 43  $429,000   $2,200   $88,150 
Humboldt 36  $295,000   $1,520   $60,620 
Lake County 43  $217,000   $1,110   $44,590 
Mariposa And Tuolumne 45  $280,000   $1,440   $57,540 
Mendocino 26  $400,000   $2,050   $82,200 
Shasta 49  $235,500   $1,210   $48,390 
Siskiyou County 48  $206,500   $1,060   $42,430 
Sutter 53  $258,500   $1,330   $53,120 
Tehama 55  $206,000   $1,060   $42,330 
Yolo 37  $385,500   $1,980   $79,220 
Yuba 44  $254,900   $1,310   $52,380 

r = revised

CALIFORNIA ASSOCIATION OF REALTORS®
Traditional Housing Affordability Index
First quarter 2017

STATE/REGION/COUNTY Q1 2017 Q4 2016 Q1 2016
CA SFH (SAAR) 32 31 34
CA Condo/Townhomes 40 40 41
Los Angeles Metropolitan Area 33 34 35
Inland Empire 43 46 48
S.F. Bay Area 25 25 28 r
United States 57 58 60
S.F. Bay Area
Alameda 21 24 r 26 r
Contra-Costa (Central County) 37 39 40 r
Marin 18 20 20
Napa 24 26 23 r
San Francisco 13 13 13
San Mateo 15 15 16
Santa Clara 19 22 22
Solano 45 45 48 r
Sonoma 25 26 28 r
Southern California
Los Angeles 29 28 31
Orange County 21 22 23
Riverside County 39 41 43 r
San Bernardino 52 54 57
San Diego 28 27 r 29 r
Ventura 25 31 30
Central Coast
Monterey 23 27 27
San Luis Obispo 26 27 r 27 r
Santa Barbara 14 21 21
Santa Cruz 17 17 18
Central Valley
Fresno 48 50 52
Kern (Bakersfield) 55 55 55
Kings County 53 56 58
Madera 47 49 50
Merced 50 48 55
Placer County 45 47 r 48
Sacramento 46 46 r 48
San Benito 32 35 36
San Joaquin 45 44 r 47
Stanislaus 48 48 50
Tulare 52 49 52
Other Calif. Counties 
Amador 47 50 50
Butte County 41 41 43
El Dorado County 43 39 39
Humboldt 36 40 42
Lake County 43 44 47
Mariposa And Tuolumne 45 51 52
Mendocino 26 32 30
Shasta 49 46 50
Siskiyou County 48 53 55
Sutter 53 52 57
Tehama 55 60 60
Yolo 37 37 38
Yuba 44 45 49
r = revised

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