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California housing affordability edges up, C.A.R. reports

LOS ANGELES, Feb. 13, 2018 /PRNewswire-USNewswire/ -- After hitting a 10-year low in third-quarter 2017, slightly lower home prices and steady mortgage rates allowed more Californians to purchase a home in the fourth quarter of 2017, the CALIFORNIA ASSOCIATION OF REALTORS^® (C.A.R.) said today.

CALIFORNIA ASSOCIATION OF REALTORS (PRNewsFoto/C.A.R.)

The percentage of home buyers who could afford to purchase a median-priced, existing single-family home in California in fourth-quarter 2017 edged up to 29 percent from 28 percent in the third quarter of 2017 but was down from 31 percent in the fourth quarter a year ago, according to C.A.R.'s Traditional Housing Affordability Index (HAI). This is the 19th consecutive quarter that the index has been below 40 percent. California's housing affordability index hit a peak of 56 percent in the first quarter of 2012.

C.A.R.'s HAI measures the percentage of all households that can afford to purchase a median-priced, single-family home in California. C.A.R. also reports affordability indices for regions and select counties within the state. The index is considered the most fundamental measure of housing well-being for homebuyers in the state.

A minimum annual income of $111,260 was needed to qualify for the purchase of a $550,990 statewide median-priced, existing single-family home in the fourth quarter of 2017. The monthly payment, including taxes and insurance on a 30-year, fixed-rate loan, would be $2,780, assuming a 20 percent down payment and an effective composite interest rate of 4.17 percent. The effective composite interest rate in third-quarter 2017 was 4.16 percent and 3.91 percent in the fourth quarter of 2016.

Conversely, the affordability of condominiums and townhomes dipped in fourth-quarter 2017 compared to the previous quarter with 37 percent of California households earning the minimum income to qualify for the purchase of a $449,720 median-priced condominium/townhome, down from 38 percent in the third quarter. An annual income of $90,810 was required to make monthly payments of $2,270. Thirty-eight percent of households could afford to purchase the $446,800 priced condo or townhome in third-quarter 2017.

Key points from the fourth-quarter 2017 Housing Affordability report include:

At the other end of the spectrum, Los Angeles, Madera, and Mariposa/Tuolumne were the most improved counties on a quarterly basis, with each of the counties climbing 3 percentage points from the previous quarter.
Five of nine counties in the San Francisco Bay Region recorded an affordability index of 20 or lower during the fourth quarter. Only Solano and Contra Costa counties posted an improvement in affordability, while Napa, San Francisco, San Mateo, Santa Clara, and Sonoma declined.
Housing affordability increased in 14 counties (Contra Costa, Solano, Los Angeles, San Luis Obispo, Fresno, Kern, Madera, Merced, Tulare, El Dorado, Humboldt, Mariposa/Tuolumne, Siskiyou, Sutter).
Fourteen counties experienced a decline in housing affordability from the third quarter (Napa, San Francisco, San Mateo, Santa Clara, Sonoma, San Bernardino, Ventura, Monterey, Santa Barbara, Stanislaus, Butte County, Lake County, Shasta, and Yuba). Lake, Santa Barbara, and Santa Clara counties dipped the most from the third quarter with each of them dropping two percentage points in the fourth quarter of 2017.
Housing affordability was unchanged in 15 counties (Alameda, Marin, Orange, Riverside, San Diego, Santa Cruz, Kings, Placer, Sacramento, San Benito, San Joaquin, Amador, Mendocino, Tehama, Yolo).
During the fourth quarter of 2017, the most affordable counties in California were Tehama (56 percent), Kern (54 percent), and Sutter, Tulare, and Kings, (all at 52 percent).
San Francisco (12 percent), San Mateo (14 percent), and Santa Clara (15 percent) counties were the least affordable areas in the state.

Housing Affordability slides (click link to open)

Affordability peak versus current
Annual required income peak vs. current
PITI peak versus current
CA housing affordability by quarter (2006-2017)
Housing affordability by county

See C.A.R.'s historical housing affordability data.
See first-time buyer housing affordability data.

Leading the way...® in California real estate for more than 110 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States with more than 190,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

CALIFORNIA ASSOCIATION OF REALTORS®
Traditional Housing Affordability Index
Fourth Quarter 2017

C.A.R. Region	Housing Affordability Index	Median Home Price	Monthly Payment Including Taxes & Insurance	Minimum Qualifying Income
Calif. Single-family home	29	$ 550,990	$ 2,780	$ 111,260
Calif. Condo/Townhome	37	$ 449,720	$ 2,270	$ 90,810
Los Angeles Metropolitan Area	31	$ 496,250	$ 2,510	$ 100,210
Inland Empire	43	$ 340,000	$ 1,720	$ 68,650
San Francisco Bay Area	21	$ 895,000	$ 4,520	$ 180,720
United States	56	$ 247,800	$ 1,250	$ 50,040

San Francisco Bay Area
Alameda	20	$ 867,250	$ 4,380	$ 175,120
Contra-Costa (Central County)	34	$ 612,000	$ 3,090	$ 123,580
Marin	18	$ 1,250,000	$ 6,310	$ 252,410
Napa	25	$ 675,000	$ 3,410	$ 136,300
San Francisco	12	$ 1,501,500	$ 7,580	$ 303,190
San Mateo	14	$ 1,500,000	$ 7,570	$ 302,890
Santa Clara	15	$ 1,270,000	$ 6,410	$ 256,450
Solano	44	$ 415,000	$ 2,090	$ 83,800
Sonoma	23	$ 655,000	$ 3,310	$ 132,260
Southern California
Los Angeles	25	$ 553,330	$ 2,790	$ 111,730
Orange County	21	$ 785,000	$ 3,960	$ 158,510
Riverside County	38	$ 385,000	$ 1,940	$ 77,740
San Bernardino	50	$ 276,250	$ 1,390	$ 55,780
San Diego	26	$ 610,000	$ 3,080	$ 123,170
Ventura	26	$ 640,000	$ 3,230	$ 129,230
Central Coast
Monterey	21	$ 599,950	$ 3,030	$ 121,150
San Luis Obispo	24	$ 594,330	$ 3,000	$ 120,010
Santa Barbara	18	$ 710,000	$ 3,580	$ 143,370
Santa Cruz	17	$ 855,000	$ 4,320	$ 172,650
Central Valley
Fresno	46	$ 259,900	$ 1,310	$ 52,480
Kern (Bakersfield)	54	$ 233,250	$ 1,180	$ 47,100
Kings County	52	$ 225,000	$ 1,140	$ 45,430
Madera	47	$ 243,950	$ 1,230	$ 49,260
Merced	48	$ 250,000	$ 1,260	$ 50,480
Placer County	44	$ 453,750	$ 2,290	$ 91,620
Sacramento	43	$ 349,900	$ 1,770	$ 70,650
San Benito	31	$ 552,000	$ 2,790	$ 111,460
San Joaquin	41	$ 349,950	$ 1,770	$ 70,660
Stanislaus	45	$ 298,250	$ 1,510	$ 60,220
Tulare	52	$ 220,000	$ 1,110	$ 44,420
Other Calif. Counties
Amador	44	$ 325,000	$ 1,640	$ 65,630
Butte County	39	$ 308,500	$ 1,560	$ 62,290
El Dorado County	42	$ 455,000	$ 2,300	$ 91,880
Humboldt	34	$ 310,500	$ 1,570	$ 62,700
Lake County	36	$ 265,000	$ 1,340	$ 53,510
Mariposa and Tuolumne	48	$ 291,750	$ 1,470	$ 58,910
Mendocino	28	$ 389,500	$ 1,970	$ 78,650
Shasta	47	$ 255,000	$ 1,290	$ 51,490
Siskiyou County	51	$ 198,500	$ 1,000	$ 40,080
Sutter	52	$ 275,000	$ 1,390	$ 55,530
Tehama	56	$ 210,000	$ 1,060	$ 42,400
Yolo	34	$ 434,950	$ 2,200	$ 87,830
Yuba	42	$ 272,500	$ 1,380	$ 55,020

CALIFORNIA ASSOCIATION OF REALTORS®
Traditional Housing Affordability Index
Fourth Quarter 2017

STATE/REGION/COUNTY	4^th Qtr 2017	3^rd Qtr 2017		4^th Qtr 2016
CA SFH (SAAR)	29	28		31
CA Condo/Townhomes	37	38		40
Los Angeles Metropolitan Area	31	30		34
Inland Empire	43	43		46
San Francisco Bay Area	21	23		25
United States	56	55		58

San Francisco Bay Area
Alameda	20	20		22	r
Contra-Costa (Central County)	34	33		39
Marin	18	18		20
Napa	25	26		26
San Francisco	12	13		13
San Mateo	14	15		15
Santa Clara	15	17		22
Solano	44	43		45
Sonoma	23	25		26
Southern California
Los Angeles	25	22		28
Orange County	21	21		22
Riverside County	38	38		41
San Bernardino	50	51		54
San Diego	26	26		27
Ventura	26	27		33	r
Central Coast
Monterey	21	22		27
San Luis Obispo	24	23		27
Santa Barbara	18	20		21
Santa Cruz	17	17		17
Central Valley
Fresno	46	45		49	r
Kern (Bakersfield)	54	53		55
Kings County	52	52		56
Madera	47	44	r	49
Merced	48	47		48
Placer County	44	44		47
Sacramento	43	43		46
San Benito	31	31		34	r
San Joaquin	41	41		44
Stanislaus	45	46		48
Tulare	52	51		49
Other Calif. Counties
Amador	44	44		50
Butte County	39	40		41
El Dorado County	42	41		39
Humboldt	34	33		40
Lake County	36	38		44
Mariposa and Tuolumne	48	45		51
Mendocino	28	28		32
Shasta	47	48		46
Siskiyou County	51	49		53
Sutter	52	51		52
Tehama	56	56		60
Yolo	34	34		37
Yuba	42	43		45

r = revised

SOURCE CALIFORNIA ASSOCIATION OF REALTORS

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California housing affordability edges up, C.A.R. reports

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