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Third quarter California housing affordability

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For release:
November 12, 2020

Higher home prices driven by dearth of inventory depresses California housing affordability
 in third-quarter 2020, C.A.R. reports

  • Twenty-eight percent of California households could afford to purchase the $693,680 median-priced home in the third quarter of 2020, down from 33 percent in second-quarter 2020 and down from 31 percent a year ago.

  • A minimum annual income of $127,200 was needed to make monthly payments of $3,180, including principal, interest, and taxes on a 30-year fixed-rate mortgage at a 3.15 percent interest rate.

  • Forty-two percent of home buyers were able to purchase the $512,000 median-priced condo or townhome. An annual income of $94,000 was required to make a monthly payment of $2,350.

LOS ANGELES (Nov. 12) – Double-digit home price increases fueled by a shortage of homes for sale pushed California’s third quarter housing affordability to its lowest level in nearly two years, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) https://www.car.org/ said today.

The percentage of home buyers who could afford to purchase a median-priced, existing single-family home in California in third-quarter 2020 fell to 28 percent from 33 percent in the second quarter of 2020 and was down from 31 percent in the third quarter a year ago, according to C.A.R.’s Traditional Housing Affordability Index. The third-quarter 2020 figure was the lowest since the fourth quarter of 2018. California’s housing affordability index hit a peak of 56 percent in the third quarter of 2012.

C.A.R.’s Housing Affordability Index (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 $127,200 was needed to qualify for the purchase of a $693,680 statewide median-priced, existing single-family home in the third quarter of 2020. The monthly payment, including taxes and insurance on a 30-year, fixed-rate loan, would be $3,180, assuming a 20 percent down payment and an effective composite interest rate of 3.15 percent. The effective composite interest rate was 3.43 percent in second-quarter 2020 and 3.85 percent in third-quarter 2019. 

Housing affordability for condominiums and townhomes also dropped from second-quarter 2020, with two in five (42 percent) California households earning the minimum income to qualify for the purchase of a $512,000 median-priced condominium/townhome. An annual income of $94,000 was required to make monthly payments of $2,350. Forty-three 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 (55 percent) could afford to purchase a $313,500 median-priced home, which required a minimum annual income of $57,600 to make monthly payments of $1,440.

Multimedia/Historical data:

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

  • The statewide median home price in third-quarter 2020 increased 13.6 percent from the previous quarter and jumped 13.8 percent from third-quarter 2019.

     

  • All major regions of the state experienced a decrease in affordability from both the previous quarter and year.

     

  • When compared to a year ago, housing affordability declined in 31 of 51 tracked counties and improved in 11.

     

  • In the San Francisco Bay Area, affordability improved from third-quarter 2019 only in San Francisco and Sonoma counties and held steady in two (Marin, Santa Clara). Affordability declined in the remaining counties (Alameda, Contra Costa, Napa, San Mateo, and Solano).

    A 2.6 percent decline in San Francisco County’s median home price during third-quarter 2020 and lower interest rates contributed to the improvement in affordability from both the previous quarter and year.

     

  • In Southern California, affordability fell from a year ago in all counties with the exception of San Bernardino, which remained flat. Los Angeles and Orange counties were the least affordable in the region (both at 23 percent) and San Bernardino County was the most affordable (51 percent).

     

  • In the Central Valley region, affordability improved from third-quarter 2019 only in Kings County and was flat in San Joaquin. San Benito County (32 percent) was the least affordable and Kings County (59 percent) was the most affordable.

     

  • In the Central Coast region, only San Luis Obispo County recorded an improvement in housing affordability from a year ago. San Luis Obispo (28 percent) was also the most affordable county in the region while Santa Barbara (17 percent) was the least affordable.

     

  • In the Far North region, affordability improved from a year ago in Shasta and Tehama counties while Plumas recorded the largest drop from 46 percent in third-quarter 2019 to 39 percent in third-quarter 2020.

     

  • In the third quarter of 2020, the most affordable counties in the state were Lassen (63 percent), Kings (59 percent), and Tuolumne (52 percent). The minimum qualifying income was $59,600 or less for each of these counties.

     

  • Mono (16 percent), Santa Barbara (17 percent), Monterey, San Mateo and Santa Cruz (all at 19 percent) were the least affordable counties in the state. San Mateo and San Francisco counties required an annual minimum qualifying income of over $305,000 to purchase a median-priced home in third-quarter 2020; San Mateo required the highest income of all counties in California at $324,000.

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
Third quarter 2020

STATE/REGION/COUNTY

3rd Qtr.

2020

2nd Qtr.

2020

 

3rd Qtr. 2019

Median Home Price

Monthly Payment Including Taxes & Insurance

Minimum Qualifying Income

Calif. Single-family home

28

33

 

31

 

$693,680

$3,180

$127,200

Calif. Condo/Townhome

42

44

 

43

 

$512,000

$2,350

$94,000

Los Angeles Metro Area

31

36

 

33

 

$610,000

$2,800

$112,000

Inland Empire

42

46

 

44

 

$435,000

$2,000

$80,000

San Francisco Bay Area

26

28

 

29

 

$1,057,500

$4,850

$194,000

United States

55

57

 

56

 

$313,500

$1,440

$57,600

 

 

 

 

 

 

 

 

 

San Francisco Bay Area

 

 

 

 

 

 

 

 

Alameda

24

26

 

26

 

$1,034,500

$4,750

$190,000

Contra Costa

34

37

 

39

 

$790,000

$3,620

$144,800

Marin

22

22

 

22

 

$1,540,000

$7,060

$282,400

Napa

27

33

 

29

 

$825,000

$3,780

$151,200

San Francisco

20

19

 

18

 

$1,665,000

$7,640

$305,600

San Mateo

19

19

 

20

 

$1,765,000

$8,100

$324,000

Santa Clara

22

22

 

22

 

$1,400,000

$6,420

$256,800

Solano

45

46

 

47

 

$500,000

$2,290

$91,600

Sonoma

29

31

 

28

 

$715,000

$3,280

$131,200

Southern California

 

 

 

 

 

 

 

 

Los Angeles

23

32

 

25

 

$708,870

$3,250

$130,000

Orange

23

25

 

25

 

$910,000

$4,170

$166,800

Riverside

40

43

 

41

 

$475,000

$2,180

$87,200

San Bernardino

51

54

 

51

 

$350,500

$1,610

$64,400

San Diego

27

30

 

29

 

$729,000

$3,340

$133,600

Ventura

28

31

 

30

 

$750,000

$3,440

$137,600

Central Coast

 

 

 

 

 

 

 

 

Monterey

19

25

 

24

 

$800,000

$3,670

$146,800

San Luis Obispo

28

31

 

27

 

$668,420

$3,070

$122,800

Santa Barbara

17

31

 

22

 

$975,500

$4,480

$179,200

Santa Cruz

19

23

 

22

 

$1,050,000

$4,820

$192,800

Central Valley

 

 

 

 

 

 

 

 

Fresno

48

51

 

49

 

$322,000

$1,480

$59,200

Glenn

49

46

 

NA

 

$284,500

$1,310

$52,400

Kern

49

50

 

51

 

$287,000

$1,320

$52,800

Kings

59

60

 

55

 

$267,500

$1,230

$49,200

Madera

49

51

 

52

 

$321,950

$1,480

$59,200

Merced

44

48

 

49

 

$320,340

$1,470

$58,800

Placer

43

45

 

48

 

$539,000

$2,470

$98,800

Sacramento

44

46

 

45

 

$429,900

$1,970

$78,800

San Benito

32

39

 

35

 

$665,000

$3,050

$122,000

San Joaquin

44

45

 

44

 

$423,000

$1,940

$77,600

Stanislaus

47

49

 

48

 

$370,000

$1,700

$68,000

Tulare

50

52

 

51

 

$275,000

$1,260

$50,400

Far North

 

 

 

 

 

 

 

 

Butte

35

38

 

38

 

$402,800

$1,850

$74,000

Lassen

63

68

 

64

 

$239,000

$1,100

$44,000

Plumas

39

52

 

46

 

$389,500

$1,790

$71,600

Shasta

50

52

 

47

 

$315,000

$1,450

$58,000

Siskiyou

49

54

 

51

 

$260,000

$1,190

$47,600

Tehama

48

54

 

46

 

$277,750

$1,270

$50,800

Other Calif. Counties

 

 

 

 

 

 

 

 

Amador

50

53

 

49

 

$355,000

$1,630

$65,200

Calaveras

47

49

 

49

 

$368,000

$1,690

$67,600

Del Norte

39

43

 

NA

 

$314,000

$1,440

$57,600

El Dorado

40

44

 

42

 

$570,000

$2,610

$104,400

Humboldt

41

43

 

37

 

$345,000

$1,580

$63,200

Lake

47

47

 

47

 

$309,000

$1,420

$56,800

Mariposa

35

43

 

44

 

$415,000

$1,900

$76,000

Mendocino

31

38

 

30

 

$493,000

$2,260

$90,400

Mono

16

17

 

17

 

$736,500

$3,380

$135,200

Nevada

41

45

 

41

 

$479,000

$2,200

$88,000

Sutter

47

50

 

47

 

$349,900

$1,610

$64,400

Tuolumne

52

54

 

49

 

$325,000

$1,490

$59,600

Yolo

38

43

 

39

 

$523,360

$2,400

$96,000

Yuba

51

52

 

48

 

$340,000

$1,560

$62,400

NA = not available

 


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