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Q1 home affordability improves to highest level in a year

Q1 home affordability improves to highest level in a year

Almost one of every three households can afford a home

Slightly lower mortgage rates and more stable prices helped boost home affordability in California during the first quarter to the highest level in a year.

Affordability climbed to 32% during the first three months of the year, compared to 28% in the fourth quarter and 31% for the same period last year, according to the California Association of Realtors. The state’s affordability reached a modern-day high of 56% in first-quarter 2012.

The affordability index is based on the number of households that can afford the median-priced home in the state, regardless of where they live. The average household needed to earn at least $114,860 per year to be able to purchase the $545,820 median-priced home during the first quarter.

The monthly payment — assuming a 20% down payment and 4.62% interest rate for a 30-year mortgage — would be $2,870. The payment includes insurance.

Affordability improved in 28 counties, while buying a home become pricier in 16 counties.

San Francisco and Santa Cruz were the least affordable housing market at 17%, followed by San Mateo County at 18%.

Lassen County was the most affordable county in the state, with 63% of families able to purchase. Kings (57%%) and Siskiyou (53%) were the second- and third-most affordable counties in the state, where annual income of $47,340 or less opens to the door to ownership.

Photo of a cluster of homes in Simi Valley by Trekandshoot/Shutterstock

Affordability by quarter
  • Q1 2019 32% 32%
  • Q4 2018 28% 28%
  • Q1 2018 31% 31%
About the author
About the author

Ron Trujillo, an award-winning business journalist-turned-public relations executive, is the editor-owner of CalHomeNews and can be reached at ron@cahomenews.com.

Affordability by county and income needed to purchase median-priced home:

San Francisco

17%; $322,480

Santa Cruz

17%; $189,910

San Diego

27%; $130,470

Los Angeles

27%; $130,470

Sacramento

44%; $75,550

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