Affordability inches higher – for now
By Ron Trujillofirstname.lastname@example.org
Slightly lower home prices and more stable interest rates helped the affordability rate inch higher during the fourth quarter, though the trend may be brief.
Twenty-nine percent of homebuyers could afford to buy the median-priced home in the final three months of 2017, compared to 28% during the third quarter – a 10-year low, according to the California Association of Realtors. The current affordability rate compares to 31% in fourth-quarter 2016.
Despite the affordability bump, the affordability index has been below 40% for 19-consecutive quarters. California remains one of the least affordable states.
Annual income of at least $111,260 was needed to qualify for the purchase of the $550,990 median-priced home. The monthly payment, including taxes and insurance, on a 30-year, fixed-rate mortgage would $2,780.
The Bay Area, as always, is the least affordable housing market in the state, with only 12% of home shoppers able to purchase in San Francisco. San Mateo and Santa Clara are the second- and third-least affordable markets at 14% and 15%, respectively.
Only seven counties have affordability rates of 50% or more in the state, with Tehama County topping the list at 56%.
But experts advise that affordability will likely decline in the first quarter, especially as interest rates are at a four-year high.
Feature photo by Ann Simpson/Shutterstock
Affordability around the state