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Third Qtr 2017 Housing affordability

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For release:
November 2, 2017

      California housing affordability drops to lowest level in 10 years, C.A.R. reports

·       Twenty-eight percent of California households could afford to purchase the $555,680 median-priced home in the third quarter of 2017, down from 29 percent in second-quarter 2017 and down from 31 percent in third-quarter 2016.

·       A minimum annual income of $112,100 was needed to make monthly payments of $2,800, including principal, interest, and taxes on a 30-year fixed-rate mortgage at a 4.16 percent interest rate.

·       Thirty-eight percent of home buyers were able to purchase the $440,000 median-priced condo or townhome. An annual income of $88,770 was required to make a monthly payment of $2,220.

 

LOS ANGELES (Nov. 2) – California’s housing affordability hit a 10-year low as tight housing inventory drove home prices higher and reduced purchasing power for homebuyers in the third quarter, primarily in previously more affordable regions such as the Inland Empire and Central Valley, 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 third-quarter 2017 fell to 28 percent, down from 29 percent in the second quarter of 2017 and down from 31 percent in the third quarter a year ago, according to C.A.R.’s Traditional Housing Affordability Index (HAI). This is the 18th consecutive quarter that the index has been below 40 percent and the lowest since third-quarter 2015. 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 homebuyers in the state.

 

A minimum annual income of $112,100 was needed to qualify for the purchase of a $555,680 statewide median-priced, existing single-family home in the third quarter of 2017. The monthly payment, including taxes and insurance on a 30-year, fixed-rate loan, would be $2,800, assuming a 20 percent down payment and an effective composite interest rate of 4.16 percent. The effective composite interest rate in second-quarter 2017 was 4.09 percent and 3.76 percent in the third quarter of 2016. 

 

Of particular note, housing affordability in Los Angeles County dropped 6 points from an index of 28 in the second quarter to an index of 22 in the third quarter as the area’s median home price jumped $81,000 in one quarter to reach nearly $600,000. Meanwhile, affordability improved in the Bay Area as prices leveled off from peaks across the region, most notably an $80,000 decline in San Francisco and a $77,500 decrease in Marin.

 

The affordability of condominiums and townhomes dipped in third-quarter 2017 compared to the previous quarter with 38 percent of California households earning the minimum income to qualify for the purchase of a $440,000 median-priced condominium/townhome, down from 39 in the second quarter. An annual income of $88,770 was required to make monthly payments of $2,220. Thirty-eight percent of households could afford to purchase the $443,400 priced condo or townhome in second-quarter 2017.

 

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

·       Compared to second-quarter 2017, housing affordability generally declined in Southern California and the Central Valley, but improved slightly across the Bay Area. Affordability improved in 15 of 43 tracked counties (Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo, Monterey, Santa Barbara, Placer, Amador, Butte, El Dorado, Mendocino, Shasta, and Siskiyou).

 

·       Eighteen counties experienced a decline in housing affordability (Solano, Los Angeles, Riverside, San Luis Obispo, Fresno, Kern, Madera, Merced, Sacramento, San Benito, San Joaquin, Stanislaus, Tulare, Humboldt, Mariposa/Tuolumne, Sutter, Tehama, and Yolo).

 

·       Housing affordability was unchanged in 10 counties (Santa Clara, Sonoma, Orange County, San Bernardino, San Diego, Ventura, Santa Cruz, Kings, Lake, and Yuba).

·       During the third quarter of 2017, the most affordable counties in California were Tehama (56 percent), Kern (53 percent), and Kings, (52 percent).

 

·       San Francisco (13 percent), San Mateo (15 percent), Santa Clara and Santa Cruz (both at 17 percent), and Marin (18 percent) counties were the least affordable areas in the state.   

 

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.

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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
Third Quarter 2017

C.A.R. Region

Housing
Affordability Index

Median Home
Price

Monthly Payment Including Taxes & Insurance

Minimum
Qualifying Income

Calif. Single-family home

28

$ 555,680

$ 2,800

$ 112,100

Calif. Condo/Townhome

38

$ 440,000

$ 2,220

$ 88,770

Los Angeles Metro Area

30

$ 502,000

$ 2,530

$ 101,270

Inland Empire

43

$ 339,900

$ 1,710

$ 68,570

San Francisco Bay Area

23

$ 860,000

$ 4,340

$ 173,500

United States

55

$ 254,000

$ 1,280

$ 51,240

 

 

 

 

 

San Francisco Bay Area

 

 

 

 

Alameda

20

$ 865,000

$ 4,360

$ 174,500

Contra-Costa

33

$ 624,450

$ 3,150

$ 125,980

Marin

18

$ 1,225,000

$ 6,180

$ 247,130

Napa

26

$ 653,000

$ 3,290

$ 131,740

San Francisco

13

$ 1,370,000

$ 6,910

$ 276,380

San Mateo

15

$ 1,441,250

$ 7,270

$ 290,760

Santa Clara

17

$ 1,165,000

$ 5,880

$ 235,030

Solano

43

$ 415,750

$ 2,100

$ 83,870

Sonoma

25

$ 630,000

$ 3,180

$ 127,100

Southern California

 

 

 

 

Los Angeles

22

$ 595,110

$ 3,000

$ 120,060

Orange County

21

$ 790,000

$ 3,980

$ 159,370

Riverside County

38

$ 387,000

$ 1,950

$ 78,070

San Bernardino

51

$ 270,000

$ 1,360

$ 54,470

San Diego

26

$ 607,000

$ 3,060

$ 122,460

Ventura

27

$ 634,000

$ 3,200

$ 127,900

Central Coast

 

 

 

 

Monterey

22

$ 585,000

$ 2,950

$ 118,020

San Luis Obispo

23

$ 599,000

$ 3,020

$ 120,840

Santa Barbara

20

$ 664,540

$ 3,350

$ 134,060

Santa Cruz

17

$ 830,000

$ 4,190

$ 167,440

Central Valley

 

 

 

 

Fresno

45

$ 259,900

$ 1,310

$ 52,430

Kern (Bakersfield)

53

$ 235,000

$ 1,190

$ 47,410

Kings County

52

$ 225,000

$ 1,130

$ 45,390

Madera

41

$ 280,000

$ 1,410

$ 56,490

Merced

47

$ 255,000

$ 1,290

$ 51,440

Placer County

44

$ 455,000

$ 2,290

$ 91,790

Sacramento

43

$ 350,000

$ 1,770

$ 70,610

San Benito

31

$ 550,000

$ 2,770

$ 110,960

San Joaquin

41

$ 352,250

$ 1,780

$ 71,060

Stanislaus

46

$ 295,000

$ 1,490

$ 59,510

Tulare

51

$ 225,000

$ 1,130

$ 45,390

Other Calif. Counties

 

 

 

 

Amador

44

$ 320,000

$ 1,610

$ 64,560

Butte County

40

$ 299,900

$ 1,510

$ 60,500

El Dorado County

41

$ 462,750

$ 2,330

$ 93,350

Humboldt

33

$ 318,000

$ 1,600

$ 64,150

Lake County

38

$ 249,950

$ 1,260

$ 50,420

Mariposa/Tuolumne

45

$ 289,000

$ 1,460

$ 58,300

Mendocino

28

$ 391,000

$ 1,970

$ 78,880

Shasta

48

$ 250,000

$ 1,260

$ 50,430

Siskiyou County

49

$ 203,500

$ 1,030

$ 41,050

Sutter

51

$ 280,600

$ 1,420

$ 56,610

Tehama

56

$ 208,500

$ 1,050

$ 42,060

Yolo

34

$ 435,000

$ 2,190

$ 87,760

Yuba

43

$ 268,520

$ 1,350

$ 54,170

r = revised


 

 

CALIFORNIA ASSOCIATION OF REALTORS®
Traditional Housing Affordability Index
Third Quarter 2017

STATE/REGION/COUNTY

Q3 2017

Q2 2017

 

Q3 2016

 

Calif. Single-family home

28

29

 

31

 

Calif. Condo/Townhome

38

39

r

40

 

Los Angeles Metro Area

30

31

 

34

 

Inland Empire

43

43

 

47

r

San Francisco Bay Area

23

21

 

27

r

United States

55

55

 

57

 

 

 

 

 

 

 

San Francisco Bay Area

 

 

 

 

 

Alameda

20

19

 

24

r

Contra-Costa (Central County)

33

31

 

37

r

Marin

18

17

 

19

 

Napa

26

25

 

25

 

San Francisco

13

12

 

14

 

San Mateo

15

14

 

15

 

Santa Clara

17

17

 

22

 

Solano

43

44

 

45

 

Sonoma

25

25

 

27

 

Southern California

 

 

 

 

 

Los Angeles

22

28

 

26

 

Orange County

21

21

 

23

 

Riverside County

38

39

 

42

 

San Bernardino

51

51

 

55

 

San Diego

26

26

 

28

r

Ventura

27

27

 

34

r

Central Coast

 

 

 

 

 

Monterey

22

21

 

25

 

San Luis Obispo

23

26

 

27

r

Santa Barbara

20

16

 

20

Santa Cruz

17

17

 

18

 

Central Valley

 

 

 

 

 

Fresno

45

47

 

50

 

Kern (Bakersfield)

53

54

 

56

 

Kings County

52

52

 

58

r

Madera

41

44

 

48

r

Merced

47

48

 

51

r

Placer County

44

43

 

47

r

Sacramento

43

45

 

46

r

San Benito

31

33

 

34

 

San Joaquin

41

43

 

45

r

Stanislaus

46

47

 

49

r

Tulare

51

52

 

50

r

Other Calif. Counties

 

 

 

 

 

Amador

44

42

 

53

 

Butte County

40

39

 

44

 

El Dorado County

41

40

 

40

 

Humboldt

33

36

 

40

 

Lake County

38

38

 

46

 

Mariposa And Tuolumne

45

46

 

50

 

Mendocino

28

27

 

33

 

Shasta

48

47

 

48

 

Siskiyou County

49

47

 

51

 

Sutter

51

53

 

51

 

Tehama

56

57

 

59

 

Yolo

34

35

 

36

 

Yuba

43

43

 

46

 

 


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