California Association of Realtors: Housing affordability dips in second quarter | TheUnion.com

California Association of Realtors: Housing affordability dips in second quarter

Submitted to The Union

Higher home prices negated the lowest interest rates in more than a year and reduced Californians’ ability to afford a home purchase in the second quarter of 2019, the California Association of Realtors reported in a news release this week.

The percentage of home buyers who could afford to purchase a median-priced, existing single-family home in California in second-quarter 2019 dipped to 30 percent from 32 percent in the first quarter of 2019, but was up from 26 percent in the second quarter a year ago, according to the association’s Traditional Housing Affordability Index.

According to a the release, a minimum annual income of $122,960 was needed to qualify for the purchase of a $608,660 statewide median-priced, existing single-family home in the second quarter of 2019. The monthly payment, including taxes and insurance on a 30-year, fixed-rate loan, would be $3,070, assuming a 20 percent down payment and an effective composite interest rate of 4.17 percent. The effective composite interest rate was 4.62 percent in first-quarter 2019 and 4.70 percent in second-quarter 2018.

Housing affordability for condominiums and townhomes also slipped in first-quarter 2019 compared to the previous quarter, with 40 percent of California households earning the minimum income to qualify for the purchase of a $475,000 median-priced condominium/townhome, down from 41 percent in the previous quarter. An annual income of $95,960 was required to make monthly payments of $2,400. Thirty-six percent of households could afford to buy a condominium/townhome a year ago.

Compared with California, more than half of the nation’s households (55 percent) could afford to purchase a $279,600 median-priced home, which required a minimum annual income of $56,480 to make monthly payments of $1,410.

Source: California Association of Realtors

When compared to a year ago, housing affordability improved in 42 tracked counties and declined in five counties. Affordability remained flat in one county. During the second quarter of 2019, the most affordable counties in California were Lassen (63 percent), Kings (55 percent) and Madera (51 percent). The minimum annual income needed to qualify for a home in these counties was less than $60,000.

Mono (15 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 $343,420 was needed to purchase a home in San Francisco County, and an annual income of $338,870 was required in San Mateo County.

Source: California Association of Realtors


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