California housing affordability climbs in first quarter 2019, C.A.R. reports

  • Thirty-two percent of California households could afford to purchase the $545,820 median-priced home in the first quarter of 2019, up from 28 percent in fourth-quarter 2018 and up from 31 percent a year ago.
  • A minimum annual income of $114,860 was needed to make monthly payments of $2,870, including principal, interest and taxes on a 30-year fixed-rate mortgage at a 4.62 percent interest rate.
  • Forty-one percent of home buyers were able to purchase the $450,000 median-priced condo or townhome. An annual income of $94,690 was required to make a monthly payment of $2,370.

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LOS ANGELES (May 14) – More Californians could afford to purchase a home in the first quarter of 2019 as lower mortgage interest rates and cooler seasonal home prices combined with higher income levels to improve California housing affordability, 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 2019 rose to 32 percent from 28 percent in the fourth quarter of 2018 and from 31 percent in the first quarter a year ago, according to C.A.R.’s Traditional Housing Affordability Index (HAI). The index climbed above 30 percent for the first time in a year. 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 $114,860 was needed to qualify for the purchase of a $545,820 statewide median-priced, existing single-family home in the first quarter of 2019. The monthly payment, including taxes and insurance on a 30-year, fixed-rate loan, would be $2,870, assuming a 20 percent down payment and an effective composite interest rate of 4.62 percent. The effective composite interest rate was 4.95 percent in fourth-quarter 2018 and 4.44 percent in first-quarter 2018.

Housing affordability for condominiums and townhomes also improved in first-quarter 2019 compared to the previous quarter, with 41 percent of California households earning the minimum income to qualify for the purchase of a $450,000 median-priced condominium/townhome, up from 37 percent in the previous quarter. An annual income of $94,690 was required to make monthly payments of $2,370. Thirty-nine 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 $254,800 median-priced home, which required a minimum annual income of $53,620 to make monthly payments of $1,340.

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

  • Housing affordability improved from first-quarter 2018 in 28 tracked counties and declined in 16 counties. Affordability in four counties remained flat.
  • In the San Francisco Bay Area, affordability improved from a year ago in every county. San Francisco County was the least affordable, with just 17 percent of households able to purchase the $1,532,500 median-priced home. Forty-six percent of Solano County households could afford the $430,500 median-priced home, making it the most affordable Bay Area county.
  • Affordability results in the Southern California region were mixed as only Orange and San Diego counties recorded an improvement from a year ago, while San Bernardino and Ventura counties experienced a decline. Affordability was unchanged in Los Angeles and Riverside counties.
  • In the Central Valley region, affordability held even from a year ago only in two counties — Fresno and Sacramento —and fell in three counties — Kern, San Benito and Stanislaus. Kings, Madera, Merced, Placer, San Joaquin and Tulare counties recorded improvements.
  • Housing affordability improved in all four counties in the Central Coast region, which includes Monterey, San Luis Obispo, Santa Barbara and Santa Cruz counties.
  • During the first quarter of 2019, the most affordable counties in California were Lassen (63 percent), Kings (57 percent) and Siskiyou (53 percent). The minimum annual income needed to qualify for a home in these counties was $47,340 or less.
  • Mono (10 percent), San Francisco (17 percent), Santa Cruz (17 percent) and San Mateo (18 percent) counties were the least affordable areas in the state. San Francisco and San Mateo counties required the highest minimum qualifying incomes in the state. An annual income of $322,480 was needed to purchase a home in San Francisco County, and an annual income of $323,010 was required in San Mateo County.

CALIFORNIA ASSOCIATION OF REALTORS®
Traditional Housing Affordability Index
First quarter 2019

STATE/REGION/COUNTY 1st Qtr. 2019 4th Qtr. 2018   1st Qtr. 2018 Median Home Price Monthly Payment Including Taxes & Insurance Minimum Qualifying Income
Calif. Single-family home 32 28   31   $545,820 $2,870 $114,860
Calif. Condo/Townhome 41 37   39   $450,000 $2,370 $94,690
Los Angeles Metro Area 33 30   32   $509,000 $2,680 $107,110
Inland Empire 42 40   43   $365,000 $1,920 $76,810
San Francisco Bay Area 26 22   23   $885,000 $4,660 $186,230
United States 57 54   57   $254,800 $1,340 $53,620
                 
San Francisco Bay Area                
Alameda 25 20   22   $865,000 $4,550 $182,020
Contra Costa 37 33   36   $630,000 $3,310 $132,570
Marin 21 19   18   $1,250,000 $6,580 $263,040
Napa 29 25   28   $672,500 $3,540 $141,510
San Francisco 17 15   15   $1,532,500 $8,060 $322,480
San Mateo 18 15   15   $1,535,000 $8,080 $323,010
Santa Clara 20 18   17   $1,220,000 $6,420 $256,720
Solano 46 39   42   $430,500 $2,260 $90,590
Sonoma 27 23   21   $632,500 $3,330 $133,100
Southern California                
Los Angeles 28 24   28   $548,630 $2,890 $115,450
Orange 24 20   21   $800,000 $4,210 $168,340
Riverside 39 37   39   $409,000 $2,150 $86,070
San Bernardino 50 48   52   $299,950 $1,580 $63,120
San Diego 27 24   26   $620,000 $3,260 $130,470
Ventura 29 29   31   $630,240 $3,320 $132,620
Central Coast                
Monterey 25 21   23   $585,000 $3,080 $123,100
San Luis Obispo 26 22   25   $602,000 $3,170 $126,680
Santa Barbara 25 26 R 22   $596,000 $3,140 $125,420
Santa Cruz 17 12   15   $902,500 $4,750 $189,910
Central Valley                
Fresno 48 46   48 R $272,500 $1,430 $57,340
Kern 50 53   56   $245,000 $1,290 $51,560
Kings 57 50   52   $224,950 $1,180 $47,340
Madera 52 47   49 R $260,000 $1,370 $54,710
Merced 46 40   43   $275,000 $1,450 $57,870
Placer 46 42   44   $480,670 $2,530 $101,150
Sacramento 44 42   44   $360,000 $1,890 $75,750
San Benito 31 28   32   $610,000 $3,210 $128,360
San Joaquin 43 38   40   $365,000 $1,920 $76,810
Stanislaus 47 45   48   $314,000 $1,650 $66,070
Tulare 51 47   50   $232,000 $1,220 $48,820
Other Calif. Counties                
Amador NA NA   45   NA NA NA
Butte 34 34   41   $361,100 $1,900 $75,990
Calaveras 47 45   46   $320,000 $1,680 $67,340
El Dorado 40 42   42   $489,000 $2,570 $102,900
Humboldt 36 33   36   $312,500 $1,640 $65,760
Lake 44 40   40   $255,000 $1,340 $53,660
Lassen 63 66   68   $197,000 $1,040 $41,450
Mariposa 41 38   44   $310,000 $1,630 $65,230
Mendocino 28 23   25   $385,500 $2,030 $81,120
Mono 10 12   8   $775,000 $4,080 $163,080
Nevada 40 35   37   $402,500 $2,120 $84,700
Plumas 48 42   47   $280,000 $1,470 $58,920
Shasta 44 45   49   $284,000 $1,490 $59,760
Siskiyou 53 50   48   $199,500 $1,050 $41,980
Sutter 46 44   49   $295,000 $1,550 $62,080
Tehama 43 46   51   $257,500 $1,350 $54,190
Tuolumne 45 48   49   $304,500 $1,600 $64,080
Yolo 39 37   41   $432,500 $2,280 $91,010
Yuba 46 44   49   $289,000 $1,520 $60,810

R = revised
NA = not available

 

Posted on May 16, 2019 at 1:43 am
Beth Cooper | Category: Uncategorized

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