Higher home prices negated the lowest interest rates in more than a year and reduced Californians’ ability to afford a home purchase in the second quarter of 2019, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said Wednesday.
The percentage of home buyers who could afford to purchase a median-priced, existing single-family home in California in second-quarter 2019 dipped to 30% from 32% in the first quarter of 2019 but was up from 26% in the second quarter a year ago, according to C.A.R.’s Traditional Housing Affordability Index (HAI). California’s housing affordability index hit a peak of 56% in the second quarter of 2012.
A minimum annual income of $122,960 was needed to qualify for the purchase of a $608,660 statewide median-priced, existing single-family home in the second quarter of 2019. The monthly payment, including taxes and insurance on a 30-year, fixed-rate loan, would be $3,070, assuming a 20% down payment and an effective composite interest rate of 4.17%. The effective composite interest rate was 4.62% in first-quarter 2019 and 4.70% in second-quarter 2018.
Housing affordability for condominiums and townhomes also slipped in first-quarter 2019 compared to the previous quarter, with 40% of California households earning the minimum income to qualify for the purchase of a $475,000 median-priced condominium/townhome, down from 41% in the previous quarter. An annual income of $95,960 was required to make monthly payments of $2,400. 36% of households could afford to buy a condominium/townhome a year ago.
Key points from the second-quarter 2019 Housing Affordability report include:
- When compared to a year ago, housing affordability improved in 42 tracked counties and declined in five counties. Affordability remained flat in one county.
- In the San Francisco Bay Area, affordability improved from second-quarter 2018 in every county. San Francisco County was the least affordable, with just 17% of households able to purchase the $1,700,000 median-priced home. Forty-six% of Solano County households could afford the $445,000 median-priced home, making it the most affordable Bay Area county.
- Affordability also improved in all Southern California regions, with Orange County being the least affordable (24%) and San Bernardino County being the most affordable (50%).
- In the Central Valley region, only Kern County experienced a decline in affordability from a year ago, decreasing from 53% in second-quarter 2018 to 50% in second-quarter 2019. San Benito County (35%) was the least affordable and Kings County (55%) was the most affordable.
- Housing affordability improved in three counties in the Central Coast region — Monterey, San Luis Obispo and Santa Cruz — and was unchanged in one, Santa Barbara.
- During the second quarter of 2019, the most affordable counties in California were Lassen (63%), Kings (55%) and Madera (51%). The minimum annual income needed to qualify for a home in these counties was less than $60,000.
- Mono (15%), San Francisco (17%), Santa Cruz (17%) and San Mateo (18%) counties were the least affordable areas in the state. San Francisco and San Mateo counties required the highest minimum qualifying incomes in the state. An annual income of $343,420 was needed to purchase a home in San Francisco County, and an annual income of $338,870 was required in San Mateo County.
| CALIFORNIA ASSOCIATION OF REALTORS® Traditional Housing Affordability Index Second quarter 2019 | ||||||||
| STATE/REGION/COUNTY | 2nd Qtr. 2019 | 1st Qtr. 2019 | 2nd Qtr. 2018 | Median Home Price | Monthly Payment Including Taxes & Insurance | Minimum Qualifying Income | ||
| Calif. Single-family home | 30 | 32 | 26 | $608,660 | $3,070 | $122,960 | ||
| Calif. Condo/Townhome | 40 | 41 | 36 | $475,000 | $2,400 | $95,960 | ||
| Los Angeles Metro Area | 32 | 33 | 29 | $540,000 | $2,730 | $109,090 | ||
| Inland Empire | 42 | 42 | 41 | $380,000 | $1,920 | $76,760 | ||
| San Francisco Bay Area | 24 | 26 | 18 | $980,000 | $4,950 | $197,970 | ||
| United States | 55 | 57 | 53 | $279,600 | $1,410 | $56,480 | ||
| San Francisco Bay Area | ||||||||
| Alameda | 23 | 25 | 16 | $950,000 | $4,800 | $191,910 | ||
| Contra Costa | 35 | 37 | 29 | $690,000 | $3,480 | $139,390 | ||
| Marin | 21 | 21 | 18 | $1,381,250 | $6,980 | $279,030 | ||
| Napa | 28 | 29 | 25 | $710,000 | $3,590 | $143,430 | ||
| San Francisco | 17 | 17 | 14 | $1,700,000 | $8,580 | $343,420 | ||
| San Mateo | 18 | 18 | 14 | $1,677,500 | $8,470 | $338,870 | ||
| Santa Clara | 20 | 20 | 16 | $1,330,000 | $6,720 | $268,680 | ||
| Solano | 46 | 46 | 38 | $445,000 | $2,250 | $89,900 | ||
| Sonoma | 28 | 27 | 20 | $660,000 | $3,330 | $133,330 | ||
| Southern California | ||||||||
| Los Angeles | 29 | 28 | 26 | $567,010 | $2,860 | $114,540 | ||
| Orange | 24 | 24 | 20 | $835,000 | $4,220 | $168,680 | ||
| Riverside | 39 | 39 | 37 | $420,000 | $2,120 | $84,840 | ||
| San Bernardino | 50 | 50 | 49 | $310,000 | $1,570 | $62,620 | ||
| San Diego | 27 | 27 | 23 | $655,000 | $3,310 | $132,320 | ||
| Ventura | 30 | 29 | 28 | $650,000 | $3,280 | $131,300 | ||
| Central Coast | ||||||||
| Monterey | 24 | 25 | 19 | $630,000 | $3,180 | $127,270 | ||
| San Luis Obispo | 25 | 26 | 22 | $640,000 | $3,230 | $129,290 | ||
| Santa Barbara | 20 | 25 | 20 | $724,500 | $3,660 | $146,360 | ||
| Santa Cruz | 17 | 17 | 12 | $937,500 | $4,740 | $189,390 | ||
| Central Valley | ||||||||
| Fresno | 48 | 48 | 46 | $279,920 | $1,410 | $56,550 | ||
| Kern | 50 | 50 | 53 | $255,000 | $1,290 | $51,510 | ||
| Kings | 55 | 57 | 50 | $250,000 | $1,260 | $50,500 | ||
| Madera | 51 | 52 | 48 | $277,000 | $1,400 | $55,960 | ||
| Merced | 47 | 46 | 42 | $282,000 | $1,420 | $56,970 | ||
| Placer | 45 | 46 | 41 | $514,950 | $2,600 | $104,030 | ||
| Sacramento | 44 | 44 | 41 | $385,000 | $1,940 | $77,770 | ||
| San Benito | 35 | 31 | 30 | $571,500 | $2,880 | $115,330 | ||
| San Joaquin | 44 | 43 | 38 | $380,000 | $1,920 | $76,760 | ||
| Stanislaus | 48 | 47 | 45 | $325,250 | $1,640 | $65,700 | ||
| Tulare | 50 | 51 | 48 | $247,500 | $1,250 | $50,000 | ||
| Other Calif. Counties | ||||||||
| Amador | NA | NA | 44 | NA | NA | NA | ||
| Butte | 35 | 34 | 38 | $370,000 | $1,870 | $74,740 | ||
| Calaveras | 46 | 47 | 43 | $343,000 | $1,730 | $69,290 | ||
| El Dorado | 40 | 40 | 38 | $519,500 | $2,620 | $104,940 | ||
| Humboldt | 37 | 36 | 33 | $320,000 | $1,610 | $64,570 | ||
| Lake | 44 | 44 | 37 | $267,000 | $1,350 | $53,820 | ||
| Lassen | 63 | 63 | 64 | $204,000 | $1,030 | $41,080 | ||
| Mariposa | 45 | 41 | 39 | $300,000 | $1,510 | $60,350 | ||
| Mendocino | 29 | 28 | 22 | $400,000 | $2,010 | $80,380 | ||
| Mono | 15 | 10 | 14 | $699,500 | $3,510 | $140,410 | ||
| Nevada | 40 | 40 | 32 | $419,000 | $2,100 | $84,020 | ||
| Plumas | 37 | 48 | 42 | $367,390 | $1,840 | $73,600 | ||
| Shasta | 47 | 44 | 46 | $281,000 | $1,410 | $56,230 | ||
| Siskiyou | 49 | 53 | 48 | $232,500 | $1,160 | $46,480 | ||
| Sutter | 46 | 46 | 45 | $312,500 | $1,560 | $62,400 | ||
| Tehama | 47 | 43 | 51 | $244,000 | $1,220 | $48,680 | ||
| Tuolumne | 48 | 45 | 43 | $300,000 | $1,490 | $59,790 | ||
| Yolo | 40 | 39 | 33 | $455,000 | $2,260 | $90,590 | ||
| Yuba | 46 | 46 | 45 | $305,000 | $1,520 | $60,660 |
| NA = not available |
