California housing affordability inches up as seasonal price declines and income growth offset higher interest rates, C.A.R. reports

· Thirty-two percent of California households could afford to purchase the $496,620 median-priced home in the first quarter of 2017, up from 31 percent in fourth-quarter 2016 but down from 30 percent in first-quarter 2016.

· A minimum annual income of $102,050 was needed to make monthly payments of $2,550, including principal, interest, and taxes on a 30-year fixed-rate mortgage at a 4.36 percent interest rate.

· Forty percent of home buyers were able to purchase the $414,940 median-priced condo or townhome. An annual income of $85,270 was required to make a monthly payment of $2,130.

News provided by

CALIFORNIA ASSOCIATION OF REALTORS

May 15, 2017, 10:59 ET

LOS ANGELES, May 15, 2017 /PRNewswire/ -- Despite a moderate increase in mortgage interest rates, seasonal price declines and higher household income elevated California's housing affordability in first-quarter 2017, 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 first-quarter 2017 inched up to 32 percent, up from 31 percent in the fourth quarter of 2016 but was down from 34 percent in the first quarter a year ago, according to C.A.R.'s Traditional Housing Affordability Index (HAI). This is the 16th consecutive quarter that the index has been below 40 percent and is near the mid-2008 low level of 29 percent. 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.

Home buyers needed to earn a minimum annual income of $102,050 to qualify for the purchase of a $496,620 statewide median-priced, existing single-family home in the first quarter of 2017. The monthly payment, including taxes and insurance on a 30-year, fixed-rate loan, would be $2,550, assuming a 20 percent down payment and an effective composite interest rate of 4.36 percent. The effective composite interest rate in fourth-quarter 2016 was 3.91 percent and 4.01 percent in the first quarter of 2016.

Homes were less affordable in first-quarter 2017 compared to first-quarter 2016, when the affordability index stood at 34 and the median home price was $465,280. An annual income of $92,570 was needed to make monthly payments of $2,310.

The affordability of condominiums and townhomes also was flat in first-quarter 2017 compared to the previous quarter. Forty percent of California households earned the minimum income to qualify for the purchase of a $414,940 median-priced condominium or townhome in the first quarter of 2017, and an annual income of $85,270 was required to make monthly payments of $2,130.

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

Compared to affordability in fourth-quarter 2016, eight of 43 counties tracked posted an improvement in housing affordability (Los Angeles, San Diego, Merced, San Joaquin, Tulare, El Dorado, Shasta, and Sutter), 26 experienced a decline (Alameda, Contra Costa, Marin, Napa, Santa Clara, Sonoma, Orange County, Riverside, San Bernardino, Ventura, Monterey, San Luis Obispo, Santa Barbara, Fresno, Kings, Madera, Placer, San Benito, Amador, Humboldt, Lake, Mariposa/Tuolumne, Mendocino, Siskiyou, Tehama, Yuba), and nine were unchanged (San Francisco, San Mateo, Santa Clara, Santa Cruz, Kern, Sacramento, Stanislaus, Butte, and Yolo).
During the first quarter of 2017, the most affordable counties in California were Tehama, Kern (both at 55 percent); Kings, Sutter (both at 53 percent); and Tulare, San Bernardino (both at 52 percent).
San Francisco (13 percent), Santa Barbara (14 percent), and San Mateo (15 percent), counties were the least affordable areas in the state.
Housing affordability figures are now available for the following counties: Amador, Butte, El Dorado, Humboldt, Lake, Mariposa and Tuolumne (combined), Mendocino, San Benito, Shasta, Siskiyou, Sutter, Tehama, Yolo, and Yuba. See accompanying tables.

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
First quarter 2017

C.A.R. Region	Housing Affordability Index	Median Home Price	Monthly Payment Including Taxes & Insurance	Minimum Qualifying Income
Calif. Single-family home	32	$496,620	$2,550	$102,050
Calif. Condo/Townhomes	40	$414,940	$2,130	$85,270
Los Angeles Metro Area	33	$461,920	$2,370	$94,920
Inland Empire	43	$326,460	$1,680	$67,080
San Francisco Bay Area	25	$780,330	$4,010	$160,350
United States	57	$232,100	$1,190	$47,690

San Francisco Bay Area
Alameda	21	$798,000	$4,100	$163,980
Contra-Costa (Cent. Cty.)	37	$562,500	$2,890	$115,590
Marin	18	$1,200,000	$6,160	$246,590
Napa	24	$668,000	$3,430	$137,270
San Francisco	13	$1,300,000	$6,680	$267,130
San Mateo	15	$1,300,000	$6,680	$267,130
Santa Clara	19	$1,070,000	$5,500	$219,870
Solano	45	$390,750	$2,010	$80,290
Sonoma	25	$605,000	$3,110	$124,320
Southern California
Los Angeles	29	$485,800	$2,500	$99,830
Orange County	21	$750,000	$3,850	$154,120
Riverside County	39	$365,000	$1,880	$75,000
San Bernardino	52	$256,900	$1,320	$52,790
San Diego	28	$564,000	$2,900	$115,900
Ventura	25	$642,480	$3,300	$132,020
Central Coast
Monterey	23	$560,000	$2,880	$115,070
San Luis Obispo	26	$550,000	$2,830	$113,020
Santa Barbara	14	$779,000	$4,000	$160,080
Santa Cruz	17	$805,000	$4,140	$165,420
Central Valley
Fresno	48	$238,000	$1,220	$48,910
Kern (Bakersfield)	55	$219,000	$1,130	$45,000
Kings County	53	$215,000	$1,100	$44,180
Madera	47	$238,000	$1,220	$48,910
Merced	50	$228,500	$1,170	$46,950
Placer County	45	$435,000	$2,230	$89,390
Sacramento	46	$319,720	$1,640	$65,700
San Benito	32	$525,000	$2,700	$107,880
San Joaquin	45	$315,000	$1,620	$64,730
Stanislaus	48	$275,000	$1,410	$56,510
Tulare	52	$212,000	$1,090	$43,560
Other Calif. Counties
Amador	47	$295,000	$1,520	$60,620
Butte County	41	$282,000	$1,450	$57,950
El Dorado County	43	$429,000	$2,200	$88,150
Humboldt	36	$295,000	$1,520	$60,620
Lake County	43	$217,000	$1,110	$44,590
Mariposa and Tuolumne	45	$280,000	$1,440	$57,540
Mendocino	26	$400,000	$2,050	$82,200
Shasta	49	$235,500	$1,210	$48,390
Siskiyou County	48	$206,500	$1,060	$42,430
Sutter	53	$258,500	$1,330	$53,120
Tehama	55	$206,000	$1,060	$42,330
Yolo	37	$385,500	$1,980	$79,220
Yuba	44	$254,900	$1,310	$52,380
r = revised

CALIFORNIA ASSOCIATION OF REALTORS®
Traditional Housing Affordability Index
First quarter 2017

STATE/REGION/COUNTY	Q1 2017	Q4 2016		Q1 2016
Calif. Single-family home	32	31		34
Calif. Condo/Townhomes	40	40		41
Los Angeles Metro Area	33	34		35
Inland Empire	43	46		48
San Francisco Bay Area	25	25		28	r
United States	57	58		60

San Francisco Bay Area
Alameda	21	24	r	26	r
Contra-Costa (Cent. Cty.)	37	39		40	r
Marin	18	20		20
Napa	24	26		23	r
San Francisco	13	13		13
San Mateo	15	15		16
Santa Clara	19	22		22
Solano	45	45		48	r
Sonoma	25	26		28	r
Southern California
Los Angeles	29	28		31
Orange County	21	22		23
Riverside County	39	41		43	r
San Bernardino	52	54		57
San Diego	28	27	r	29	r
Ventura	25	31		30
Central Coast
Monterey	23	27		27
San Luis Obispo	26	27	r	27	r
Santa Barbara	14	21		21
Santa Cruz	17	17		18
Central Valley
Fresno	48	50		52
Kern (Bakersfield)	55	55		55
Kings County	53	56		58
Madera	47	49		50
Merced	50	48		55
Placer County	45	47	r	48
Sacramento	46	46	r	48
San Benito	32	35		36
San Joaquin	45	44	r	47
Stanislaus	48	48		50
Tulare	52	49		52
Other Calif. Counties
Amador	47	50		50
Butte County	41	41		43
El Dorado County	43	39		39
Humboldt	36	40		42
Lake County	43	44		47
Mariposa and Tuolumne	45	51		52
Mendocino	26	32		30
Shasta	49	46		50
Siskiyou County	48	53		55
Sutter	53	52		57
Tehama	55	60		60
Yolo	37	37		38
Yuba	44	45		49
r = revised