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3rd Quarter housing affordability report

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For release:
November 7, 2019

 Cheaper mortgages and income growth improve housing affordability in third quarter, C.A.R. reports

  • Thirty-one percent of California households could afford to purchase the $613,470 median-priced home in the third quarter of 2019, up from 30 percent in second-quarter 2019 and up from 27 percent a year ago.

  • A minimum annual income of $120,400 was needed to make monthly payments of $3,010, including principal, interest and taxes on a 30-year fixed-rate mortgage at a 3.85 percent interest rate.

  • Forty-three percent of home buyers were able to purchase the $465,000 median-priced condo or townhome. An annual income of $91,200 was required to make a monthly payment of $2,280.

LOS ANGELES (Nov. 7) – A lower cost of borrowing and higher income levels allowed more Californians to afford a home purchase during the third quarter of 2019, 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 2019 edged up to 31 percent from 30 percent in the second quarter of 2019 and up from 27 percent in the third 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 third 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 $120,400 was needed to qualify for the purchase of a $613,470 statewide median-priced, existing single-family home in the third quarter of 2019. The monthly payment, including taxes and insurance on a 30-year, fixed-rate loan, would be $3,010, assuming a 20 percent down payment and an effective composite interest rate of 3.85 percent, the lowest rate since third-quarter 2016. The effective composite interest rate was 4.17 percent in second-quarter 2019 and 4.77 percent a year ago.

Housing affordability for condominiums and townhomes also improved in the third-quarter 2019 compared to the previous quarter, with 43 percent of California households earning the minimum income to qualify for the purchase of a $465,000 median-priced condominium/townhome, up from 40 percent in the previous quarter. An annual income of $91,200 was required to make monthly payments of $2,280. Thirty-six percent of households could afford to buy a condominium/townhome a year ago.

Compared with California, more than half of the nation’s households (56 percent) could afford to purchase a $280,020 median-priced home, which required a minimum annual income of $54,800 to make monthly payments of $1,370.

Key points from the third-quarter 2019 Housing Affordability report include:

  • When compared to a year ago, housing affordability improved in 42 tracked counties and declined in five counties. Affordability remained flat in one county.
  • In the San Francisco Bay Area, affordability improved from third-quarter 2018 in every county. San Francisco County was the least affordable, with just 18 percent of households able to purchase the $1,580,000 median-priced home. Forty-seven percent of Solano County households could afford the $460,000 median-priced home, making it the most affordable Bay Area county.
  • Affordability also improved in all Southern California regions, with Los Angeles and Orange counties tied for being the least affordable (25 percent) and San Bernardino County being the most affordable (51 percent).
  • In the Central Valley region, only Kern County experienced a decline in affordability from a year ago, decreasing from 53 percent in third-quarter 2018 to 51 percent in third-quarter 2019. San Benito County (35 percent) was the least affordable and Kings County (55 percent) was the most affordable.
  • Housing affordability improved in three counties in the Central Coast region — Monterey, San Luis Obispo and Santa Cruz — and declined in Santa Barbara.
  • During the third quarter of 2019, the most affordable counties in California were Lassen (64 percent), Kings (55 percent) and Madera (52 percent). The minimum annual income needed to qualify for a home in these counties was less than $56,000.
  • Mono (17 percent), San Francisco (18 percent), and San Mateo (20 percent) counties were the least affordable areas in the state. San Francisco required the highest minimum qualifying income in the entire state. An annual income of $309,600 was needed to purchase a home in San Francisco County, though down from $343,240 in second-quarter 2019.

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
Third quarter 2019

STATE/REGION/COUNTY

3rd Qtr. 2019

2nd Qtr. 2019

 

3rd Qtr. 2018

Median Home Price

Monthly Payment Including Taxes & Insurance

Minimum Qualifying Income

Calif. Single-family home

31

30

 

27

 

$613,470

$3,010

$120,400

Calif. Condo/Townhome

43

40

 

36

 

$465,000

$2,280

$91,200

Los Angeles Metro Area

33

32

 

30

 

$547,250

$2,680

$107,200

Inland Empire

44

42

 

41

 

$380,000

$1,860

$74,400

San Francisco Bay Area

29

24

 

21

 

$910,000

$4,460

$178,400

United States

56

55

 

53

 

$280,200

$1,370

$54,800

 

 

 

 

 

 

 

 

 

San Francisco Bay Area

 

 

 

 

 

 

 

 

Alameda

26

23

 

18

 

$920,000

$4,510

$180,400

Contra Costa

39

35

 

32

 

$665,000

$3,260

$130,400

Marin

22

21

 

19

 

$1,275,000

$6,250

$250,000

Napa

29

28

 

24

 

$725,250

$3,550

$142,000

San Francisco

18

17

 

15

 

$1,580,000

$7,740

$309,600

San Mateo

20

18

 

14

 

$1,510,000

$7,400

$296,000

Santa Clara

22

20

 

17

 

$1,240,000

$6,080

$243,200

Solano

47

46

 

38

 

$460,000

$2,250

$90,000

Sonoma

28

28

 

22

 

$673,250

$3,300

$132,000

Southern California

 

 

 

 

 

 

 

 

Los Angeles

25

29

 

22

 

$649,570

$3,180

$127,200

Orange

25

24

 

20

 

$826,000

$4,050

$162,000

Riverside

41

39

 

37

 

$420,000

$2,060

$82,400

San Bernardino

51

50

 

48

 

$315,000

$1,540

$61,600

San Diego

29

27

 

23

 

$645,000

$3,160

$126,400

Ventura

30

30

 

28

 

$667,500

$3,270

$130,800

Central Coast

 

 

 

 

 

 

 

 

Monterey

24

24

 

20

 

$649,000

$3,180

$127,200

San Luis Obispo

27

25

 

21

 

$635,000

$3,110

$124,400

Santa Barbara

22

20

 

26

 

$710,000

$3,480

$139,200

Santa Cruz

22

17

 

12

 

$855,000

$4,190

$167,600

Central Valley

 

 

 

 

 

 

 

 

Fresno

49

48

 

46

 

$285,500

$1,400

$56,000

Kern

51

50

 

53

 

$260,000

$1,270

$50,800

Kings

55

55

 

51

 

$257,000

$1,260

$50,400

Madera

52

51

 

48

 

$282,880

$1,390

$55,600

Merced

49

47

 

40

 

$279,000

$1,370

$54,800

Placer

48

45

 

42

 

$499,000

$2,450

$98,000

Sacramento

45

44

 

42

 

$388,000

$1,900

$76,000

San Benito

35

35

 

27

 

$589,500

$2,890

$115,600

San Joaquin

44

44

 

38

 

$385,000

$1,890

$75,600

Stanislaus

48

48

 

45

 

$335,000

$1,640

$65,600

Tulare

51

50

 

47

 

$250,000

$1,230

$49,200

Other Calif. Counties

 

 

 

 

 

 

 

Amador

49

46

r

NA

 

$320,000

$1,570

$62,800

Butte

38

35

 

39

 

$360,000

$1,760

$70,400

Calaveras

49

46

 

43

 

$330,000

$1,620

$64,800

El Dorado

42

40

 

41

 

$509,600

$2,500

$100,000

Humboldt

37

37

 

33

 

$330,250

$1,620

$64,800

Lake

47

44

 

39

 

$259,500

$1,270

$50,800

Lassen

64

63

 

67

 

$204,000

$1,000

$40,000

Mariposa

44

45

 

40

 

$316,500

$1,550

$62,000

Mendocino

30

29

 

23

 

$405,000

$1,980

$79,200

Mono

17

15

 

11

 

$697,500

$3,420

$136,800

Nevada

41

40

 

32

 

$417,500

$2,050

$82,000

Plumas

46

37

 

44

 

$316,500

$1,550

$62,000

Shasta

47

47

 

44

 

$285,000

$1,400

$56,000

Siskiyou

51

49

 

47

 

$225,000

$1,100

$44,000

Sutter

47

46

 

45

 

$315,000

$1,540

$61,600

Tehama

46

47

 

49

 

$255,500

$1,250

$50,000

Tuolumne

49

48

 

41

 

$300,000

$1,470

$58,800

Yolo

39

40

 

35

 

$469,000

$2,300

$92,000

Yuba

48

46

 

48

 

$299,950

$1,470

$58,800

R = revised
NA = not available

 

 


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