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Third quarter 2021 housing affordabiity

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For release:
November 10, 2021

 California housing affordability improves in third-quarter 2021 as mortgage rates remain low while prices begin leveling off, C.A.R. reports

  • Twenty-four percent of California households could afford to purchase the $814,580 median-priced home in the third quarter of 2021, up from 23 percent in second-quarter 2021 but down from 28 percent in third-quarter 2020.

  • A minimum annual income of $148,400 was needed to make monthly payments of $3,710, including principal, interest and taxes on a 30-year fixed-rate mortgage at a 3.07 percent interest rate.

  • Thirty-seven percent of home buyers were able to purchase the $600,000 median-priced condo or townhome. A minimum annual income of $109,200 was required to make a monthly payment of $2,730.

     

  • Infographic: https://www.car.org/Global/Infographics/HAI-2021-Q3

LOS ANGELES (Nov. 10) – A slightly less competitive housing market combined with modest household income growth allowed more Californians to purchase a median-priced home in the third quarter of 2021, 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 2021 edged up to 24 percent from 23 percent in the second quarter of 2021 but was down from 28 percent in the third quarter of 2020, according to C.A.R.’s Traditional Housing Affordability Index (HAI). The third-quarter 2021 figure is less than half of the affordability index 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 $148,400 was needed to qualify for the purchase of a $814,580 statewide median-priced, existing single-family home in the third quarter of 2021. The monthly payment, including taxes and insurance on a 30-year, fixed-rate loan, would be $3,710, assuming a 20 percent down payment and an effective composite interest rate of 3.07 percent. The effective composite interest rate was 3.20 percent in second-quarter 2021 and 3.15 percent in third-quarter 2020. 

Despite setting a record high median price in third-quarter 2021, affordability for condominiums and townhomes was unchanged from the previous quarter. Thirty-seven percent of California households earned the minimum income to qualify for the purchase of a $600,000 median-priced condo/townhome in the third quarter of 2021, which required an annual income of $109,200 to make monthly payments of $2,730. The third quarter 2021 figure was down from 42 percent a year ago.

Compared with California, half of the nation’s households could afford to purchase a $363,700 median-priced home, which required a minimum annual income of $66,400 to make monthly payments of $1,660. Nationwide affordability was down from 55 percent a year ago.

Key points from the third-quarter 2021 Housing Affordability report include:

  • Compared to the previous quarter, housing affordability declined in 10 tracked counties, improved in 30 counties, and remained unchanged in 11. Compared to the previous year, 41 counties experienced a drop in housing affordability from a year ago, seven counties remained unchanged, and only three counties improved (San Francisco, Monterey, Lassen).

  • In the San Francisco Bay Area, affordability improved from the previous quarter in every county, except Napa, which held even at 23 percent. Alameda and San Mateo counties were the least affordable, tied at just 19 percent of households able to purchase the $2 million and $1.3 million median-priced home, respectively. Forty-two percent of Solano County households could afford the $580,000 median-priced home, making it the most affordable Bay Area county.

  • In the Southern California region, affordability improved from the previous quarter in four counties (Los Angeles, Orange, San Diego, and Ventura) and was unchanged in Riverside (33 percent), and San Bernardino, which was the most affordable (43 percent).

     

  • In the Central Valley region, Kings County was the most affordable at 56 percent, and San Benito was the least affordable at 27 percent.

  • In the Central Coast region, Santa Barbara and Santa Cruz counties were tied for the least affordable, and San Luis Obispo County was the most affordable at 24 percent.

     

  • During the third quarter of 2021, Lassen (68 percent) remained the most affordable county in California in the third quarter of 2021, followed by Kings (56 percent) and Tulare (46 percent). The minimum qualifying income was less than $58,800 for each of these counties. Lassen also had the lowest minimum qualifying income to purchase a median-priced home at $39,200.

     

  • Mono (13 percent), Santa Barbara (17 percent) and Santa Cruz (17 percent) were the least affordable counties in the state, with each of them requiring at least a minimum income of $153,200 to purchase a median-priced home in those counties. Purchasing a median-priced home in San Mateo required the highest minimum annual income, reaching $364,000 in the third quarter of 2021.

     

  • Three additional Bay Area counties required minimum annual incomes of over $300,000 in third-quarter 2021, including San Francisco ($331,600), Marin ($305,200), and Santa Clara ($300,400).

  • Housing affordability declined the most on a year-over-year basis in Yuba and Tehama, dropping 13 points and 10 points, respectively. The plunge in affordability was due primarily to the surge in the counties’ median prices from a year ago, relative to the moderate rise in household income. Yuba County’s median price increased 20.9 percent in third-quarter 2021, and Tehama’s grew 25.7 percent year-over-year. Calaveras County had the largest median price growth (29.1 percent) but the fourth largest drop in affordability (8 points) from a year ago.

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 2021

STATE/REGION/COUNTY

3rd Qtr.

2021

2nd Qtr.

2021

 

3rd Qtr.

2020

Median Home Price

Monthly Payment Including Taxes & Insurance

Minimum Qualifying Income

Calif. Single-family home

24

23

 

28

 

$814,580

$3,710

$148,400

Calif. Condo/Townhome

37

37

 

42

 

$600,000

$2,730

$109,200

Los Angeles Metro Area

26

24

 

31

 

$730,000

$3,320

$132,800

Inland Empire

36

36

 

42

 

$524,000

$2,390

$95,600

San Francisco Bay Area

22

19

 

26

 

$1,292,250

$5,880

$235,200

United States

50

50

 

55

 

$363,700

$1,660

$66,400

 

 

 

 

 

 

 

 

 

San Francisco Bay Area

 

 

 

 

 

 

 

 

Alameda

19

18

 

24

 

$1,300,000

$5,920

$236,800

Contra Costa

31

26

 

34

 

$905,000

$4,120

$164,800

Marin

22

21

 

22

 

$1,675,000

$7,630

$305,200

Napa

23

23

 

27

 

$930,000

$4,230

$169,200

San Francisco

21

19

 

20

 

$1,820,000

$8,290

$331,600

San Mateo

19

17

 

19

 

$2,000,000

$9,110

$364,400

Santa Clara

22

21

 

22

 

$1,650,000

$7,510

$300,400

Solano

42

40

 

45

 

$580,000

$2,640

$105,600

Sonoma

28

25

 

29

 

$765,000

$3,480

$139,200

Southern California

 

 

 

 

 

 

 

 

Los Angeles

19

22

 

23

 

$860,870

$3,920

$156,800

Orange

18

17

 

23

 

$1,100,000

$5,010

$200,400

Riverside

33

33

 

40

 

$570,000

$2,600

$104,000

San Bernardino

43

43

 

51

 

$437,500

$1,990

$79,600

San Diego

23

22

 

27

 

$850,000

$3,870

$154,800

Ventura

25

23

 

28

 

$830,000

$3,780

$151,200

Central Coast

 

 

 

 

 

 

 

 

Monterey

20

18

 

19

 

$827,250

$3,770

$150,800

San Luis Obispo

24

21

 

28

 

$772,500

$3,520

$140,800

Santa Barbara

17

13

 

17

 

$1,015,000

$4,620

$184,800

Santa Cruz

17

15

 

19

 

$1,201,000

$5,470

$218,800

Central Valley

 

 

 

 

 

 

 

 

Fresno

42

43

 

48

 

$375,000

$1,710

$68,400

Glenn

44

45

 

49

 

$325,000

$1,480

$59,200

Kern

45

45

 

49

 

$332,000

$1,510

$60,400

Kings

56

56

 

59

 

$315,000

$1,430

$57,200

Madera

43

44

 

49

 

$378,000

$1,720

$68,800

Merced

44

44

 

44

 

$365,000

$1,660

$66,400

Placer

38

35

 

43

 

$650,000

$2,960

$118,400

Sacramento

39

38

 

44

 

$511,950

$2,330

$93,200

San Benito

27

25

 

32

 

$778,500

$3,540

$141,600

San Joaquin

37

37

 

44

 

$512,000

$2,330

$93,200

Stanislaus

41

40

 

47

 

$435,000

$1,980

$79,200

Tulare

46

45

 

50

 

$322,000

$1,470

$58,800

Far North

 

 

 

 

 

 

 

 

Butte

35

33

 

35

 

$441,750

$2,010

$80,400

Lassen

68

62

 

63

 

$215,000

$980

$39,200

Plumas

38

39

 

39

 

$423,000

$1,930

$77,200

Shasta

44

45

 

50

 

$375,000

$1,710

$68,400

Siskiyou

41

44

 

49

 

$331,500

$1,510

$60,400

Tehama

38

38

 

48

 

$349,000

$1,590

$63,600

Other Calif. Counties

 

 

 

 

 

 

 

 

Amador

42

40

 

50

 

$425,000

$1,940

$77,600

Calaveras

39

37

 

47

 

$475,000

$2,160

$86,400

Del Norte

35

35

 

39

 

$382,500

$1,740

$69,600

El Dorado

35

31

 

40

 

$660,000

$3,010

$120,400

Humboldt

32

32

 

41

 

$420,000

$1,910

$76,400

Lake

42

43

 

47

 

$352,000

$1,600

$64,000

Mariposa

35

36

 

35

 

$422,650

$1,920

$76,800

Mendocino

23

23

 

31

 

$554,000

$2,520

$100,800

Mono

13

9

 

16

 

$841,000

$3,830

$153,200

Nevada

35

34

 

41

 

$561,000

$2,550

$102,000

Sutter

42

40

 

47

 

$405,000

$1,840

$73,600

Tuolumne

45

44

 

52

 

$389,500

$1,770

$70,800

Yolo

33

32

 

38

 

$600,000

$2,730

$109,200

Yuba

38

39

 

51

 

$411,000

$1,870

$74,800

 


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