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4th QTR Housing Affordability

Thursday, February 11, 2016   (0 Comments)
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February 11, 2016


California housing affordability edges up from third quarter; slips from year ago, C.A.R. reports

 

Sixteen regions see improvements, with Contra Costa, Los Angeles, Alameda, Sonoma, and San Joaquin counties leading the way.


LOS ANGELES (Feb. 11) – Lower interest rates and level home prices combined to perk up California housing affordability in the fourth quarter of 2015, compared to the previous quarter, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today. Affordability, however, was down when compared to the previous year.

 

The percentage of home buyers who could afford to purchase a median-priced, existing single-family home in California in fourth-quarter 2015 ticked up to 30 percent from the 29 percent recorded in the third quarter of 2015 but was down from 31 percent in fourth-quarter 2014, according to C.A.R.’s Traditional Housing Affordability Index (HAI).  This is the 11th 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 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.

 

Home buyers needed to earn a minimum annual income of $96,640 to qualify for the purchase of a $483,050 statewide median-priced, existing single-family home in the fourth quarter of 2015.  The monthly payment, including taxes and insurance on a 30-year, fixed-rate loan, would be $2,420, assuming a 20 percent down payment and an effective composite interest rate of 4.07 percent.  The effective composite interest rate in third-quarter 2015 was 4.16 percent and 4.20 percent in the fourth quarter of 2014. 

 

The median home price was $488,540 in third-quarter 2015, and an annual income of $98,580 was needed to purchase a home at that price.

 

Unchanged from the previous quarter and year, 39 percent of California households earned the minimum income to qualify for the purchase of a condominium or townhome in the last quarter of 2015. An annual income of $78,720 was required to make monthly payments of $1,970.

 

Key points from the fourth-quarter 2015 Housing Affordability report include:

·         Compared to affordability in third-quarter 2015, 16 counties saw an improvement in housing affordability, five experienced declines, and six were unchanged.

·         Regionally, affordability improved slightly across the state with affordability gains mostly in the higher-priced areas, while less expensive regions experienced minimal effects due to level home prices.

·         Alameda, Contra Costa, Sonoma, Los Angeles, and San Joaquin counties saw the greatest quarter-to-quarter improvement in housing affordability due to flat home prices and lower interest rates.

·         During the fourth quarter of 2015, the five most affordable counties in California were Kings (61 percent), Merced (55 percent), San Bernardino (53 percent), Tulare (54 percent), and Fresno (49 percent).

·         San Francisco (11 percent), San Mateo (14 percent), and Marin (17 percent), counties were the least affordable areas of the state.  

 

 

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

Calif. Single-family home

30

$ 483,050

$ 2,420

$ 96,640

Calif. Condo/Townhome

39

$ 393,470

$ 1,970

$ 78,720

Los Angeles Metro Area

32

$ 442,830

$ 2,210

$ 88,600

Inland Empire

45

$ 295,550

$ 1,480

$ 59,130

San Francisco Bay Area

24

$ 735,170

$ 3,680

$ 147,080

United States

58

$ 222,700

$ 1,110

$ 44,550

 

 

 

 

 

San Francisco Bay Area

 

 

 

 

Alameda

22

$ 728,160

$ 3,640

$ 145,680

Contra-Costa (Central County)

37

$ 526,550

$ 2,630

$ 105,350

Marin

17

$ 1,171,340

$ 5,860

$ 234,350

Napa

21

$ 655,940

$ 3,280

$ 131,230

San Francisco

11

$ 1,270,110

$ 6,350

$ 254,110

San Mateo

14

$ 1,195,000

$ 5,980

$ 239,080

Santa Clara

20

$ 940,000

$ 4,700

$ 188,060

Solano

45

$ 355,900

$1,780

$ 71,200

Sonoma

26

$ 551,340

$ 2,760

$ 110,300

Southern California

 

 

 

 

Los Angeles

27

$ 481,940

$ 2,410

$ 96,420

Orange County

21

$ 708,700

$ 3,540

$ 141,790

Riverside County

39

$ 340,260

$ 1,700

$ 68,070

San Bernardino

53

$ 233,730

$ 1,170

$ 46,760

San Diego

25

$ 546,770

$ 2,730

$ 109,390

Ventura

26

$ 608,430

$ 3,040

$ 121,730

Central Coast

 

 

 

 

Monterey

25

$ 500,950

$ 2,510

$ 100,220

San Luis Obispo

26

$ 541,990

$ 2,710

$ 108,430

Santa Barbara

23

$ 607,880

$3,040

$ 121,620

Santa Cruz

21

$ 720,000

$ 3,600

$ 144,050

Central Valley

 

 

 

 

Fresno

49

$ 219,960

$ 1,100

$ 44,010

Kings County

61

$ 190,970

$ 960

$ 38,210

Madera

48

$ 220,830

$ 1,100

$ 44,180

Merced

55

$ 205,190

$ 1,030

$41,050

Placer County

44

$ 394,770

$ 1,970

$ 78,980

Sacramento

46

$ 294,050

$ 1,470

$ 58,830

San Joaquin

38

$ 284,820

$ 1,420

$ 56,980

Stanislaus

40

$ 253,320

$ 1,270

$ 50,680

Tulare

54

$ 189,300

$ 950

$ 37,870

 

 

 

CALIFORNIA ASSOCIATION OF REALTORS®
Traditional Housing Affordability Index

 

STATE/REGION/COUNTY

Q4 2015

Q3 2015

 

Q4 2014

 

Calif. Single-family home

30

29

 

31

 

Calif. Condo/Townhome

39

39

r

39

 

Los Angeles Metro Area

32

31

 

34

 

Inland Empire

45

45

 

47

 

San Francisco Bay Area

24

22

r

21

 

United States

58

56

 

59

 

 

 

 

 

 

 

San Francisco Bay Area

 

 

 

 

 

Alameda

22

20

 

20

 

Contra-Costa

37

34

r

40

r

Marin

17

19

 

15

 

Napa

21

21

 

24

 

San Francisco

11

10

 

11

r

San Mateo

14

13

 

15

 

Santa Clara

20

19

 

22

 

Solano

45

44

 

50

 

Sonoma

26

24

 

29

 

Southern California

 

 

 

 

 

Los Angeles

27

24

 

28

 

Orange County

21

20

 

21

 

Riverside County

39

39

 

41

 

San Bernardino

53

54

 

57

 

San Diego

25

24

 

27

 

Ventura

26

25

 

29

 

Central Coast

 

 

 

 

 

Monterey

25

27

 

27

 

San Luis Obispo

26

27

 

26

 

Santa Barbara

23

18

 

21

 

Santa Cruz

21

19

 

17

 

Central Valley

 

 

 

 

 

Fresno

49

49

 

53

 

Kings County

61

60

 

64

 

Madera

48

49

 

50

r

Merced

55

55

 

53

 

Placer County

44

44

 

45

 

Sacramento

46

46

 

49

 

San Joaquin

38

36

 

41

r

Stanislaus

40

40

 

44

r

Tulare

54

53

 

56

 

r = revised

 

 

See C.A.R.’s historical housing affordability data.
See first-time buyer housing affordability data.

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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 185,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

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