Every region except Kings County posts lower affordability compared to previous quarter.
• Thirty percent of California households could afford to purchase the $485,100 median-priced home in the second quarter, down from 34 percent in first-quarter 2015 and unchanged from 30 percent in second quarter 2014.
• A minimum annual income of $95,980 was needed to make monthly payments of $2,400, including principal, interest, and taxes on a 30-year fixed-rate mortgage at 3.95 percent interest rate.
• Thirty-nine percent of home buyers were able to purchase the $388,250 median-priced condo or townhome. An annual income of $76,820 was required to make a monthly payment of $1,920.
LOS ANGELES (Aug. 11) – A sharp increase in spring housing demand elevated home prices to levels last seen in late 2007 and reduced California’s housing affordability considerably in the second quarter, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today. The second-quarter 2015 drop in housing affordability follows two straight quarters of improvements for the state.
The percentage of home buyers who could afford to purchase a median-priced, existing single-family home in California in second-quarter 2015 fell to 30 percent from the 34 percent recorded in the first quarter of 2015 and flat from the 30 percent in the second 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 second 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 $95,980 to qualify for the purchase of a $485,100 statewide median-priced, existing single-family home in the second quarter of 2015. The monthly payment, including taxes and insurance on a 30-year, fixed-rate loan, would be $2,400, assuming a 20 percent down payment and an effective composite interest rate of 3.95 percent.
The median home price was $441,610 in first-quarter 2015, and an annual income of $87,540 was needed to purchase a home at that price. The effective composite interest rate in second-quarter 2015 was 3.97 percent.
Key points from the second-quarter 2015 Housing Affordability report include:
• Condominiums and townhomes were more affordable than single-family homes, with 39 percent of home buyers able to purchase the $388,250 median-priced condo or townhome. An annual income of $76,820 was required to make a monthly payment of $1,920.
• Compared to the previous quarter, housing affordability declined in every region except Kings County, which held steady, primarily driven by growth in spring home prices.
• Compared to the previous year, housing affordability improved in five regions (Marin, Orange, Monterey, San Luis Obispo, and Santa Cruz) and held steady in four regions (Alameda, Santa Clara, Los Angeles, and Placer).
• The remaining 19 regions (Contra Costa, Napa, San Francisco, San Mateo, Solano, Sonoma, Riverside, San Bernardino, San Diego, Ventura, Santa Barbara, Fresno, Kings, Madera, Merced, Sacramento, San Joaquin, Stanislaus, and Tulare) saw declines in housing affordability from the previous year.
• In the Bay Area, Marin, San Luis Obispo, and Santa Cruz counties posted the largest year-to-year improvement in affordability mainly due to growth in annual household income and lower interest rates. San Luis Obispo and Santa Cruz, in particular, experienced a large increase in incomes relative to price changes. Tech workers may have migrated to Santa Cruz due to its affordability and relative proximity to San Jose and Bay Area.
Housing Affordability slides (click link to open)
Affordability peak versus currentAnnual income peak versus currentPITI peak versus current
CALIFORNIA ASSOCIATION OF REALTORS®
Traditional Housing Affordability Index
| C.A.R. Region | Housing
Affordability Index | Median Home
Price | Monthly Payment Including Taxes & Insurance | Minimum
Qualifying Income |
| CA SFH (SAAR) | 30 | $ 485,100 | $ 2,400 | $ 95,980 |
| CA Condo/Townhomes | 39 | $ 388,250 | $ 1,920 | $ 76,820 |
| Los Angeles Metropolitan Area | 32 | $ 440,620 | $ 2,180 | $ 87,180 |
| Inland Empire | 46 | $ 291,730 | $ 1,440 | $ 57,720 |
| S.F. Bay Area | 20 | $ 841,560 | $ 4,160 | $ 166,500 |
| US | 57 | $ 229,400 | $ 1,130 | $ 45,390 |
| | | | | |
| S.F. Bay Area | | | | |
| Alameda | 18 | $ 812,810 | $ 4,020 | $ 160,820 |
| Contra-Costa (Central County) | 18 | $ 836,020 | $ 4,140 | $ 165,410 |
| Marin | 17 | $ 1,169,900 | $ 5,790 | $ 231,470 |
| Napa | 23 | $ 623,970 | $ 3,090 | $ 123,450 |
| San Francisco | 10 | $ 1,353,450 | $ 6,690 | $ 267,780 |
| San Mateo | 13 | $ 1,300,000 | $ 6,430 | $ 257,210 |
| Santa Clara | 19 | $ 980,000 | $ 4,850 | $ 193,890 |
| Solano | 46 | $ 352,850 | $ 1,750 | $ 69,810 |
| Sonoma | 25 | $ 566,980 | $ 2,800 | $ 112,180 |
| Southern California | | | | |
| Los Angeles | 30 | $ 445,190 | $ 2,200 | $ 88,080 |
| Orange County | 21 | $ 713,220 | $ 3,530 | $ 141,110 |
| Riverside County | 40 | $ 334,580 | $ 1,650 | $ 66,200 |
| San Bernardino | 56 | $ 223,830 | $ 1,110 | $ 44,290 |
| San Diego | 25 | $ 547,840 | $ 2,710 | $ 108,390 |
| Ventura | 25 | $ 619,060 | $ 3,060 | $ 122,480 |
| Central Coast | | | | |
| Monterey | 27 | $ 480,000 | $ 2,370 | $ 94,970 |
| San Luis Obispo | 28 | $ 518,550 | $ 2,560 | $ 102,600 |
| Santa Barbara | 16 | $ 741,570 | $ 3,670 | $ 146,720 |
| Santa Cruz | 20 | $ 727,250 | $ 3,600 | $ 143,890 |
| Central Valley | | | | |
| Fresno | 50 | $ 219,030 | $ 1,080 | $ 43,340 |
| Kings County | 62 | $ 186,330 | $ 920 | $ 36,870 |
| Madera | 50 | $ 216,430 | $ 1,070 | $ 42,820 |
| Merced | 55 | $ 205,060 | $ 1,010 | $ 40,570 |
| Placer County | 44 | $ 399,680 | $ 1,980 | $ 79,080 |
| Sacramento | 47 | $ 291,030 | $ 1,440 | $ 57,580 |
| San Joaquin | 37 | $ 285,810 | $ 1,410 | $ 56,550 |
| Stanislaus | 41 | $ 246,480 | $ 1,220 | $ 48,770 |
| Tulare | 54 | $ 190,740 | $ 940 | $ 37,740 |
CALIFORNIA ASSOCIATION OF REALTORS®
Traditional Housing Affordability Index
| STATE/REGION/COUNTY | Q2 2015 | Q1 2015 | | Q2 2014 | |
| CA SFH (SAAR) | 30 | 34 | | 30 | |
| CA Condo/Townhomes | 39 | 41 | | 38 | |
| Los Angeles Metropolitan Area | 32 | 35 | | 33 | |
| Inland Empire | 46 | 47 | | 47 | |
| S.F. Bay Area | 20 | 23 | | 20 | |
| US | 57 | 61 | | 57 | |
| | | | | | |
| S.F. Bay Area | | | | | |
| Alameda | 18 | 23 | | 18 | |
| Contra-Costa (Central County) | 18 | 21 | | 19 | |
| Marin | 17 | 19 | | 14 | |
| Napa | 23 | 34 | | 25 | |
| San Francisco | 10 | 12 | | 10 | |
| San Mateo | 13 | 14 | | 14 | |
| Santa Clara | 19 | 22 | | 19 | |
| Solano | 46 | 48 | | 50 | |
| Sonoma | 25 | 31 | | 29 | |
| Southern California | | | | | |
| Los Angeles | 30 | 31 | | 30 | |
| Orange County | 21 | 22 | | 20 | |
| Riverside County | 40 | 42 | | 41 | |
| San Bernardino | 56 | 58 | | 58 | |
| San Diego | 25 | 28 | | 26 | |
| Ventura | 25 | 28 | | 28 | |
| Central Coast | | | | | |
| Monterey | 27 | 29 | | 26 | |
| San Luis Obispo | 28 | 30 | | 23 | |
| Santa Barbara | 16 | 18 | | 18 | |
| Santa Cruz | 20 | 22 | | 18 | |
| Central Valley | | | | | |
| Fresno | 50 | 51 | | 53 | |
| Kings County | 62 | 62 | | 64 | |
| Madera | 50 | 51 | | 55 | r |
| Merced | 55 | 60 | | 57 | |
| Placer County | 44 | 46 | | 44 | |
| Sacramento | 47 | 49 | | 48 | |
| San Joaquin | 37 | 39 | | 40 | - |
| Stanislaus | 41 | 43 | | 45 | - |
| Tulare | 54 | 57 | | 56 | |
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 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States with more than 175,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.
