Q3 home affordability improves; buyers need income of $125,540
By Ron Trujilloemail@example.com
California became a bit more affordable for homebuyers during the third quarter, thanks to more stable home prices and mortgage rates.
The California Association of Realtors estimates 27% of families could afford the median-priced home of $588,530 during the July-through-September period. That’s slightly higher than the 26% in the second quarter and lower than the 28% a year ago. The second-quarter affordability rate of 26% was the lowest in 10 years.
The state’s affordability rate has been below 30% for five of the past eight quarters, and is far from the peak of 56% in second-quarter 2012, when the housing market was still recovering from the slide.
Of course, a percentage point decline does not swing open the door to ownership, especially considering the annual income needed to qualify for a mortgage for the median-priced home in the state — $125,540. The state’s median household income is about $68,000, according to the Census Bureau.
The monthly payment, including taxes and insurance, on a 30-year, fixed-rate loan would be $3,140, assuming a 20% down payment (or $117,706), according to CAR.
The Bay Area is the least affordable housing market, with only 14% of families able to buy in San Mateo, the lowest rate in the state. San Bernardino and Madera counties were the most affordable of the major counties in the state, at 48%.
Photo of hilltop homes in Santa Clarita by Feokistoff/Shutterstock
Affordability by county and income needed to purchase median-priced home: