Higher home prices substantially diminish California housing affordability in first quarter 2021, C.A.R. reports

- Twenty-seven percent of California households could afford to purchase the $720,490 median-priced home in the first quarter of 2021, down from 35 percent in first-quarter 2020 and unchanged from fourth-quarter 2020.

- A minimum annual income of $131,200 was needed to make monthly payments of $3,280, including principal, interest and taxes on a 30-year fixed-rate mortgage at a 3.08 percent interest rate.

- Forty percent of home buyers were able to purchase the $535,000 median-priced condo or townhome. An annual income of $97,600 was required to make a monthly payment of $2,440.

- Infographic: https://www.car.org/marketing/clients/infographics/Q12021HAI

News provided by

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

May 11, 2021, 10:00 ET

LOS ANGELES, May 11, 2021 /PRNewswire/ -- Housing affordability in California remained at the lowest level since mid-2018 as higher home prices fueled by a shortage of homes for sale pushed the state's median home price more than 22 percent higher on a year-over-year basis, resulting in an 8 percentage-point annual decline in California's housing affordability index in the first quarter of 2021, 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 2021 dropped to 27 percent from 35 percent in the first quarter of 2020 and was unchanged from the fourth quarter of 2020, according to C.A.R.'s Traditional Housing Affordability Index (HAI). The first-quarter 2021 figure is less than half of the affordability index 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 $131,200 was needed to qualify for the purchase of a $720,490 statewide median-priced, existing single-family home in the first quarter of 2021. The monthly payment, including taxes and insurance on a 30-year, fixed-rate loan, would be $3,280, assuming a 20 percent down payment and an effective composite interest rate of 3.08 percent. The effective composite interest rate was 2.96 percent in fourth-quarter 2020 and 3.70 percent in first-quarter 2020.

Housing affordability for condominiums and townhomes also declined in first-quarter 2021 compared to a year ago, with 40 percent of California households earning the minimum income to qualify for the purchase of a $535,000 median-priced condominium/townhome, down from 44 percent a year ago and from 41 percent in fourth-quarter 2020. An annual income of $97,600 was required to make monthly payments of $2,440.

Compared with California, more than half of the nation's households (54 percent) could afford to purchase a $319,200 median-priced home, which required a minimum annual income of $58,000 to make monthly payments of $1,450. Nationwide affordability also fell from 59 percent a year ago.

Key points from the first-quarter 2021 Housing Affordability report include:

Housing affordability held even on an annual basis in only two tracked counties (San Francisco and Santa Clara) and declined in 49 counties. Compared to the previous quarter, housing affordability declined in 33 counties, improved in eight counties and was unchanged in 10 counties.
In the San Francisco Bay Area, affordability declined from a year ago in every county except San Francisco and Santa Clara counties, which held even. San Mateo County was the least affordable, with just 19 percent of households able to purchase the $1,850,000 median-priced home. Forty-four percent of Solano County households could afford the $525,000 median-priced home, making it the most affordable Bay Area county.
Affordability fell from a year ago in all Southern California counties with Orange County being the least affordable (20 percent) and San Bernardino County being the most affordable (45 percent).
In the Central Valley region, Kings County was the most affordable at 58 percent, and San Benito was the least affordable at 31 percent.
In the Central Coast region, Santa Barbara County was the least affordable at 14 percent and San Luis Obispo County was the most affordable at 25 percent.
During the first quarter of 2021, Lassen (62 percent) remained the most affordable county in the state, followed by Kings (58 percent), Siskiyou (49 percent), and Tuolumne (49 percent). The minimum qualifying income was less than $64,000 for each of these counties. Lassen also had the lowest minimum qualifying annual income to purchase a median-priced home at $45,200.
Mono (3 percent), Santa Barbara (14 percent), and Monterey (17 percent) were the least affordable counties in the state, with each of them requiring at least a minimum annual income of $157,600 to purchase a median-priced home in the county. San Mateo remained the least affordable county in the state and required the highest minimum qualifying annual income of $337,200 in the first quarter of 2021. It was the only county in California that had a minimum qualifying annual income of over $300,000 in first-quarter 2021.

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
First quarter 2021

STATE/REGION/COUNTY	Qtr. 1 2021	Qtr. 4 2020	Qtr. 1 2020	Median Home Price	Monthly Payment Including Taxes & Insurance	Minimum Qualifying Income
Calif. Single-family homes	27	27	35	$720,490	$3,280	$131,200
Calif. Condo/Townhomes	40	41	44	$535,000	$2,440	$97,600
Los Angeles Metro Area	29	30	35	$650,000	$2,960	$118,400
Inland Empire	39	41	46	$475,000	$2,160	$86,400
San Francisco Bay Area	23	24	31	$1,157,000	$5,270	$210,800
United States	54	55	59	$319,200	$1,450	$58,000

San Francisco Bay Area
Alameda	22	23	28	$1,109,000	$5,050	$202,000
Contra Costa	32	34	42	$835,000	$3,800	$152,000
Marin	22	22	23	$1,530,000	$6,970	$278,800
Napa	24	29	34	$901,500	$4,110	$164,400
San Francisco	20	20	20	$1,745,000	$7,950	$318,000
San Mateo	19	20	20	$1,850,000	$8,430	$337,200
Santa Clara	22	22	22	$1,500,000	$6,830	$273,200
Solano	44	45	49	$525,000	$2,390	$95,600
Sonoma	27	28	32	$742,500	$3,380	$135,200
Southern California
Los Angeles	25	24	31	$682,360	$3,110	$124,400
Orange	20	22	24	$1,000,000	$4,560	$182,400
Riverside	36	39	44	$520,000	$2,370	$94,800
San Bernardino	45	48	53	$399,000	$1,820	$72,800
San Diego	25	26	30	$763,500	$3,480	$139,200
Ventura	27	27	32	$769,000	$3,500	$140,000
Central Coast
Monterey	17	18	26	$865,000	$3,940	$157,600
San Luis Obispo	25	25	31	$709,750	$3,230	$129,200
Santa Barbara	14	16	27	$1,060,000	$4,830	$193,200
Santa Cruz	18	19	23	$1,100,000	$5,010	$200,400
Central Valley
Fresno	46	48	52	$340,000	$1,550	$62,000
Glenn	44	47	46	$320,000	$1,460	$58,400
Kern	47	48	52	$300,180	$1,370	$54,800
Kings	58	57	61	$282,500	$1,290	$51,600
Madera	46	49	52	$349,000	$1,590	$63,600
Merced	46	45	48	$315,000	$1,440	$57,600
Placer	39	42	46	$599,000	$2,730	$109,200
Sacramento	41	43	47	$465,000	$2,120	$84,800
San Benito	31	31	42	$718,000	$3,270	$130,800
San Joaquin	42	42	46	$442,250	$2,020	$80,800
Stanislaus	44	46	51	$400,000	$1,820	$72,800
Tulare	47	49	53	$300,000	$1,370	$54,800
Far North
Butte	37	35	41	$400,000	$1,820	$72,800
Lassen	62	67	64	$249,000	$1,130	$45,200
Plumas	47	45	48	$337,500	$1,540	$61,600
Shasta	48	49	52	$335,000	$1,530	$61,200
Siskiyou	49	48	52	$266,000	$1,210	$48,400
Tehama	46	45	49	$290,000	$1,320	$52,800
Other Calif. Counties
Amador	44	50	53	$404,570	$1,840	$73,600
Calaveras	41	44	48	$427,000	$1,950	$78,000
Del Norte	36	36	50	$349,000	$1,590	$63,600
El Dorado	36	41	47	$620,000	$2,820	$112,800
Humboldt	39	38	43	$361,000	$1,640	$65,600
Lake	46	46	52	$317,000	$1,440	$57,600
Mariposa	37	41	46	$400,000	$1,820	$72,800
Mendocino	27	28	36	$520,000	$2,370	$94,800
Mono	3	11	17	$1,450,000	$6,610	$264,400
Nevada	37	40	46	$525,000	$2,390	$95,600
Sutter	45	46	50	$365,500	$1,670	$66,800
Tuolumne	49	50	54	$350,000	$1,590	$63,600
Yolo	38	38	43	$515,000	$2,350	$94,000
Yuba	45	49	53	$370,000	$1,690	$67,600