California housing affordability holds steady in fourth quarter, C.A.R. reports

- Thirty-one percent of California households could afford to purchase the $607,040 median-priced home in the fourth quarter of 2019, unchanged from third-quarter 2019 and up from 28 percent a year ago.

- A minimum annual income of $119,600 was needed to make monthly payments of $2,990, including principal, interest and taxes on a 30-year fixed-rate mortgage at a 3.89 percent interest rate.

- Forty-one percent of home buyers were able to purchase the $480,000 median-priced condo or townhome. An annual income of $94,400 was required to make a monthly payment of $2,360.

News provided by

CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.)

Feb 12, 2020, 11:00 ET

LOS ANGELES, Feb. 12, 2020 /PRNewswire/ -- Slightly higher mortgage interest rates offset steady home prices and held California housing affordability constant during the fourth quarter of 2019. However, more Californians could afford a home purchase compared to a year ago, 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 2019 was unchanged from the third quarter of 2019 at 31 percent but was up from 28 percent in the fourth 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 percent in the fourth 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 $119,600 was needed to qualify for the purchase of a $607,040 statewide median-priced, existing single-family home in the fourth quarter of 2019. The monthly payment, including taxes and insurance on a 30-year, fixed-rate loan, would be $2,990, assuming a 20 percent down payment and an effective composite interest rate of 3.89 percent. The effective composite interest rate was 3.85 percent in third-quarter 2019 and 4.95 percent a year ago.

Housing affordability for condominiums and townhomes also improved from a year ago but decreased compared to the third quarter of 2019 because of higher median condominium prices. Forty-one percent of California households earned the minimum income to qualify for the purchase of a $480,000 median-priced condominium/townhome, down from 43 percent in the previous quarter. An annual income of $94,400 was required to make monthly payments of $2,360. Thirty-seven percent of households could afford to buy a condominium/townhome a year ago.

Compared with California, more than half of the nation's households (57 percent) could afford to purchase a $274,900 median-priced home, which required a minimum annual income of $54,000 to make monthly payments of $1,350.

Key points from the fourth-quarter 2019 Housing Affordability report include:

When compared to a year ago, housing affordability improved in 44 tracked counties and declined in four counties. Affordability remained flat in one county.
In the San Francisco Bay Area, affordability improved from fourth-quarter 2018 in every county. San Francisco County was the least affordable, with just 18 percent of households able to purchase the $1,600,000 median-priced home. Forty-seven percent of Solano County households could afford the $460,000 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 (26 percent) and San Bernardino County being the most affordable (51 percent).
All counties in the Central Valley region experienced an increase in affordability from a year ago. San Benito County (34 percent) was the least affordable and Kings County (55 percent) was the most affordable.
Housing affordability improved in three of four counties in the Central Coast region with Santa Cruz experiencing the biggest improvement in affordability — jumping to 21 percent in fourth-quarter 2019 from 12 percent a year ago. Santa Barbara County was the only county in the region with a year-over-year decline in affordability, with the index dipping to 23 percent in fourth-quarter 2019 from 26 percent a year ago.
During the fourth quarter of 2019, the most affordable counties in California were Lassen (63 percent), Kings (55 percent) and Tulare and Plumas (52 percent). The minimum annual income needed to qualify for a home in these counties was less than $54,000.
San Francisco (18 percent), San Mateo (20 percent) and Santa Cruz (21 percent) counties were the least affordable areas in the state. San Francisco County required the highest minimum qualifying income in the entire state. An annual income of $314,800 was needed to purchase a home in San Francisco County.
San Mateo County also required an annual income exceeding $300,000 to purchase a median-priced home.

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®
Traditional Housing Affordability Index
Fourth quarter 2019

STATE/REGION/COUNTY	4th Qtr. 2019	3rd Qtr. 2019	4th Qtr. 2018		Median Home Price	Monthly Payment Including Taxes & Insurance	Minimum Qualifying Income
Calif. Single-family home	31	31	28		607040	2990	119600
Calif. Condo/Townhome	41	43	37		480000	2360	94400
Los Angeles Metro Area	33	33	30		550000	2710	108400
Inland Empire	44	44	40		380000	1870	74800
San Francisco Bay Area	28	29	22		925000	4550	182000
United States	57	56	54		274900	1350	54000

San Francisco Bay Area
Alameda	27	26	20		905000	4450	178000
Contra Costa	39	39	33		662500	3260	130400
Marin	22	22	19		1325000	6520	260800
Napa	30	29	25		715100	3520	140800
San Francisco	18	18	15		1600000	7870	314800
San Mateo	20	20	15		1550000	7620	304800
Santa Clara	22	22	18		1246000	6130	245200
Solano	47	47	39		460000	2260	90400
Sonoma	30	28	23		656360	3230	129200
Southern California
Los Angeles	27	25	24		617310	3040	121600
Orange	26	25	20		828000	4070	162800
Riverside	41	41	37		420000	2070	82800
San Bernardino	51	51	48		318000	1560	62400
San Diego	29	29	24		655000	3220	128800
Ventura	31	30	29		660000	3250	130000
Central Coast
Monterey	24	24	21		655000	3220	128800
San Luis Obispo	29	27	22		617000	3030	121200
Santa Barbara	23	22	26		696250	3420	136800
Santa Cruz	21	22	12		883000	4340	173600
Central Valley
Fresno	49	49	46		289000	1420	56800
Kern	50	51	53		260000	1280	51200
Kings	55	55	50		255000	1250	50000
Madera	51	52	47		290900	1430	57200
Merced	49	49	40		280000	1380	55200
Placer	49	48	42		495500	2440	97600
Sacramento	45	45	42		385000	1890	75600
San Benito	34	35	28		600000	2950	118000
San Joaquin	45	44	38		380000	1870	74800
Stanislaus	48	48	45		335000	1650	66000
Tulare	52	51	47		250000	1230	49200
Other Calif. Counties
Amador	49	49	45	r	320000	1570	62800
Butte	39	38	34		350000	1720	68800
Calaveras	47	49	45		349000	1720	68800
El Dorado	45	42	42		481000	2370	94800
Humboldt	38	37	33		325000	1600	64000
Lake	45	47	40		275000	1350	54000
Lassen	63	64	66		215000	1060	42400
Mariposa	45	44	38		309500	1520	60800
Mendocino	29	30	23		415000	2040	81600
Mono	26	17	12		570000	2800	112000
Nevada	40	41	35		430000	2120	84800
Plumas	52	46	42		275000	1350	54000
Shasta	48	47	45		285000	1400	56000
Siskiyou	50	51	50		230000	1130	45200
Sutter	46	47	44		317450	1560	62400
Tehama	45	46	46		261500	1290	51600
Tuolumne	51	49	48		289000	1420	56800
Yolo	40	39	37		459950	2260	90400
Yuba	47	48	44		305000	1500	60000