firstname.lastname@example.org | Nov 23, 2017 | 0
CAR: Affordability drops to 10-year low in Q3
By Ron Trujillo / email@example.com
California’s housing affordability dropped to the lowest level in a decade during the third quarter, as the demand for homes coupled with a severe shortage of inventory are pushing prices to record or near-record levels depending on the region.
Only 28% of California households could afford to buy the $555,680 median-priced home during the July through September period, according to the California Association of Realtors. The current figure compares to 29% during the second quarter – and 31% in third-quarter 2016.
Affordability was a tale of two stories in the state, with the Bay Area improving slightly as price gains slowed – though the region has the highest home prices, and lowest affordability rates – while Los Angeles County’s affordability plunged 6 percentage points, from 28% in the second quarter to 22% during the third quarter.
The biggest reason for the Los Angeles slide? A hefty $81,000 price gain to nearly $600,000 during the third quarter.
San Francisco County is the least affordable market in the state at 13%, with a median-home price of $1.37 million. San Mateo was the second-hardest market for home-shoppers, with only 15% able to purchase, while Santa Clara and nearby Santa Cruz counties were at 17%.
Only Tehama County at 56% could beat the nation’s housing affordability rate (55%). Only five other counties – Kern, Kings, San Bernardino, Sutter and Tulare – were affordable to at least half of their residents.
Griffith Park Observatory photo courtesy of Ron Reiring/Flickr
$112,000 and counting
On average, California households would need annual income of at least $112,000 in order to qualify for the $2,800 monthly payment on a 30-year mortgage for the median-priced home. The calculation includes a 20% down payment – or about $111,000.
Minimum qualifying income by county:
- San Francisco: $276,380
- Santa Cruz: $167,440
- Orange: $159,370
- Santa Barbara: $134,060
- Sonoma: $127,100
- San Diego: $122,460
- San Luis Obispo: $120,848
- Los Angeles: $120,060
- Riverside: $78,070
- Sacramento: $70,610
- Fresno: $52,430
- Kern: $47,410