Subjects: SVY, ECO, STP
California housing affordability inches up in fourth quarter 2018, C.A.R. reports
LOS ANGELES, Feb. 12, 2019 /PRNewswire/ -- Lower seasonal home prices allowed more Californians to afford a home purchase in the fourth quarter of 2018 compared to the previous quarter, but higher interest rates pushed affordability lower compared to the previous year, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today.
The percentage of home buyers who could afford to purchase a median-priced, existing single-family home in California in fourth-quarter 2018 edged up to 28 percent from 27 percent in the third quarter of 2018 but was down from 29 percent in the fourth quarter a year ago, according to C.A.R.'s Traditional Housing Affordability Index (HAI). The index has been below 30 percent for six of the past eight quarters. 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 home buyers in the state.
A minimum annual income of $122,340 was needed to qualify for the purchase of a $564,270 statewide median-priced, existing single-family home in the fourth quarter of 2018. The monthly payment, including taxes and insurance on a 30-year, fixed-rate loan, would be $3,060, assuming a 20 percent down payment and an effective composite interest rate of 4.95 percent. The effective composite interest rate was 4.77 percent in third-quarter 2018 and 4.17 percent in fourth-quarter 2017.
Housing affordability for condominiums and townhomes also edged up in fourth-quarter 2018 compared to the previous quarter with 37 percent of California households earning the minimum income to qualify for the purchase of a $460,000 median-priced condominium/townhome, up from 36 percent in the third quarter. An annual income of $99,730 was required to make monthly payments of $2,490. Thirty-eight percent of households could afford to buy a condominium/townhome a year ago.
Compared with California, more than half of the nation's households (54 percent) could afford to purchase a $257,600 median-priced home, which required a minimum annual income of $55,850 to make monthly payments of $1,400.
Key points from the fourth-quarter 2018 Housing Affordability report include:
- Housing affordability improved from fourth-quarter 2017 in 10 tracked counties and declined in 30 counties. Affordability in eight counties remained flat.
- In the San Francisco Bay Area, affordability improved from a year ago in Marin, San Francisco, San Mateo and Santa Clara counties, while Contra Costa and Solano counties saw a decline in housing affordability. Affordability held steady from a year ago in Alameda, Napa and Sonoma counties.
- All but one county in the Southern California region posted a decrease in affordability compared to a year ago. Affordability declined in Los Angeles, Orange, Riverside, San Bernardino and San Diego counties. Only Ventura County recorded an improvement.
- In the Central Valley Region, affordability held even only in two counties ? Fresno and Stanislaus ? while it fell from fourth-quarter 2017 in Kern, Kings, Madera, Merced, Placer, Sacramento, San Benito, San Joaquin and Tulare counties.
- In the Central Coast region, affordability dropped from a year ago in San Luis Obispo and Santa Cruz but was unchanged in Monterey County. Housing affordability in Santa Barbara County jumped from 18 percent in fourth-quarter 2017 to 32 percent in fourth-quarter 2018, primarily due to a sharp drop in the median home price, which fell from $710,000 in fourth-quarter 2017 to $514,950 in fourth-quarter 2018.
- During the fourth quarter of 2018, the most affordable counties in California were Lassen (66 percent), Kern (53 percent) and Kings and Siskiyou (both at 50 percent). The minimum annual income needed to qualify for a home in these counties was $52,030 or less.
- Mono (12 percent), Santa Cruz (12 percent), San Mateo (15 percent), San Francisco (15 percent) and Santa Clara (18 percent) counties were the least affordable areas in the state. San Francisco and San Mateo counties had the highest minimum qualifying incomes in the state. An annual income of $326,290 was needed to purchase a home in San Francisco County, and an annual income of $329,300 was required in San Mateo County.
Housing Affordability slides (click link to open)
Affordability peak versus current
Annual required income peak vs. current
Monthly PITI peak versus current
Affordability by region peak versus current
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 200,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.
CALIFORNIA ASSOCIATION OF REALTORS® | ||||||||
STATE/REGION/COUNTY | 4th Qtr 2018 | 3rd Qtr 2018 | 4th Qtr 2017 | Median Home Price | Monthly Payment Including Taxes & Insurance | Minimum Qualifying Income | ||
Calif. Single-family home | 28 | 27 | 29 | $564,270 | $3,060 | $122,340 | ||
Calif. Condo/Townhome | 37 | 36 | r | 38 | $460,000 | $2,490 | $99,730 | |
Los Angeles Metro Area | 30 | 30 | 31 | $510,000 | $2,760 | $110,570 | ||
Inland Empire | 40 | 41 | 43 | $360,000 | $1,950 | $78,050 | ||
San Francisco Bay Area | 22 | 21 | 21 | $910,000 | $4,930 | $197,290 | ||
United States | 54 | 53 | 56 | $257,600 | $1,400 | $55,850 | ||
San Francisco Bay Area | ||||||||
Alameda | 20 | 18 | 20 | $890,000 | $4,820 | $192,960 | ||
Contra Costa | 33 | 32 | 34 | $638,000 | $3,460 | $138,320 | ||
Marin | 19 | 19 | 18 | $1,312,500 | $7,110 | $284,560 | ||
Napa | 25 | 24 | 25 | $714,000 | $3,870 | $154,800 | ||
San Francisco | 15 | 15 | 12 | $1,505,000 | $8,160 | $326,290 | ||
San Mateo | 15 | 14 | 14 | $1,518,890 | $8,230 | $329,300 | ||
Santa Clara | 18 | 17 | 15 | $1,250,000 | $6,780 | $271,010 | ||
Solano | 39 | 38 | 44 | $435,000 | $2,360 | $94,310 | ||
Sonoma | 23 | 22 | 23 | $640,000 | $3,470 | $138,760 | ||
Southern California | ||||||||
Los Angeles | 24 | 22 | 25 | $576,100 | $3,120 | $124,900 | ||
Orange | 20 | 20 | 21 | $799,000 | $4,330 | $173,230 | ||
Riverside | 37 | 37 | 38 | $400,000 | $2,170 | $86,720 | ||
San Bernardino | 48 | 48 | 50 | $295,000 | $1,600 | $63,960 | ||
San Diego | 24 | 23 | 26 | $625,950 | $3,390 | $135,710 | ||
Ventura | 29 | 28 | 26 | $649,000 | $3,520 | $140,710 | ||
Central Coast | ||||||||
Monterey | 21 | 20 | 21 | $615,000 | $3,330 | $133,340 | ||
San Luis Obispo | 22 | 21 | 24 | $620,650 | $3,360 | $134,560 | ||
Santa Barbara | 32 | 26 | 18 | $514,950 | $2,790 | $111,640 | ||
Santa Cruz | 12 | 12 | 17 | $885,000 | $4,800 | $191,870 | ||
Central Valley | ||||||||
Fresno | 46 | 46 | 46 | $269,000 | $1,460 | $58,320 | ||
Kern | 53 | 53 | 54 | $240,000 | $1,300 | $52,030 | ||
Kings | 50 | 51 | 52 | $231,000 | $1,250 | $50,080 | ||
Madera | 47 | 48 | 49 | $264,000 | $1,430 | $57,240 | ||
Merced | 40 | 40 | 48 | $270,950 | $1,470 | $58,740 | ||
Placer | 42 | 42 | 44 | $475,000 | $2,570 | $102,980 | ||
Sacramento | 42 | 42 | 43 | $363,000 | $1,970 | $78,700 | ||
San Benito | 28 | 27 | 31 | $586,000 | $3,180 | $127,050 | ||
San Joaquin | 38 | 38 | 41 | $365,000 | $1,980 | $73,130 | ||
Stanislaus | 45 | 45 | 45 | $312,500 | $1,690 | $67,750 | ||
Tulare | 47 | 47 | 52 | $235,000 | $1,270 | $50,950 | ||
Other Calif. Counties | ||||||||
Amador | NA | NA | 44 | NA | NA | NA | ||
Butte | 34 | 39 | 39 | $339,500 | $1,840 | $73,610 | ||
Calaveras | 45 | 43 | 50 | $315,000 | $1,710 | $68,290 | ||
El Dorado | 42 | 41 | 42 | $474,000 | $2,570 | $102,770 | ||
Humboldt | 33 | 33 | 34 | $310,000 | $1,680 | $67,210 | ||
Lake | 40 | 39 | 36 | $259,000 | $1,400 | $56,150 | ||
Lassen | 66 | 67 | 65 | $175,000 | $950 | $37,940 | ||
Mariposa | 38 | 40 | 48 | $322,250 | $1,750 | $69,870 | ||
Mendocino | 23 | 23 | 28 | $420,000 | $2,280 | $91,060 | ||
Mono | 12 | 11 | 19 | $640,000 | $3,470 | $138,760 | ||
Nevada | 35 | 32 | 39 | $395,000 | $2,140 | $85,640 | ||
Plumas | 42 | 44 | 45 | $287,500 | $1,560 | $62,330 | ||
Shasta | 45 | 44 | 47 | $267,500 | $1,450 | $58,000 | ||
Siskiyou | 50 | 47 | 51 | $195,000 | $1,060 | $42,280 | ||
Sutter | 44 | 45 | 52 | $305,000 | $1,650 | $66,130 | ||
Tehama | 46 | 49 | 56 | $235,000 | $1,270 | $50,950 | ||
Tuolumne | 48 | 41 | 48 | $278,500 | $1,510 | $60,380 | ||
Yolo | 37 | 35 | 34 | $432,000 | $2,340 | $93,660 | ||
Yuba | 44 | 48 | 42 | $291,000 | $1,580 | $63,090 | ||
r = revised |
SOURCE CALIFORNIA ASSOCIATION OF REALTORS
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