Affordability inches higher in Q1, thanks to pay raises
By Ron Trujillo/ email@example.com
Bigger paychecks and steadier home prices boosted home affordability during the first quarter, a positive sign for home shoppers dealing with fast-rising interest rates and prices.
Affordability inched up to 31% during the first quarter of the year, compared to 29% in the fourth quarter — and down slightly from 32% for the first three months of 2017, according to the California Association of Realtors.
Twenty-eight regions, including six of the nine counties in the Bay Area, reported an increase in affordability, according to the quarterly report. Affordability declined in 14 counties in the state.
Affordability is based on a median-home price of $538,640. The monthly mortgage payment, including taxes and insurance, on a 30-year, fixed-rate loan would be $2,790, assuming a 20% down payment and 4.44% interest rate.
The average homeowner would need to earn at least $111,500 per year to qualify for the mortgage, with a hefty down payment of $107,728.
Lassen County was the most affordable region at 68%, followed by Kern County at 56%. Kings and San Bernardino counties were the third-most affordable at 52%.
Mono County was the least affordable at 8%, while San Francisco, San Mateo and Santa Cruz counties at 15% were the second-least affordable markets.
Feature photo of home construction on Bay Area hillside by Ann Baldwin/Shutterstock
Affordability by county and income needed to purchase median-priced home: