California Homes Now Affordable to only 1/3 of Californians

Housing affordability is on a prolongedrndownhill slide in California, falling for the sixth time in the third quarterrnof 2013.  As measured by The CaliforniarnAssociation of Realtors® (C.A.R.) Traditional Housing Affordability Indexrn(HAI), the percentage of home buyers who could afford to purchase arnmedian-priced, existing single-family home in the state fell by four percentagernpoints to 32 percent compared to the first quarter of the year and was downrnfrom 49 percent in the third quarter of 2012. rn</p

The affordability index had reached anrnall-time high of 56 percent in the first quarter of 2012 but has trended lower everyrnquarter since.  The third quarter of 2013rnmarked the first time the HAI has fallen below 35 since the third quarter ofrn2008.</p

Home buyers needed to earn a minimumrnannual income of $89,170 to qualify for the purchase of a $433,940 statewidernmedian-priced, existing single-family home in the third quarter of 2013. rnThe monthly payment, including taxes and insurance on a 30-year fixed-raternloan, would be $2,230, assuming a 20 percent down payment and an effectiverncomposite interest rate of 4.36 percent.  A year earlier it required anrnannual income of $65,828 to purchase a median priced home of $339,930 inrnCalifornia with an interest rate of 3.64 percent. </p

Nearly every county experienced arndouble-digit decline in affordability when compared to last year, reflectingrnthe substantial increase in California home prices on a year-to-yearrnbasis.  Sacramento, Monterey, and Sonoma counties experienced the largestrnyear-to-year declines, while San Mateo, Marin, and San Francisco countiesrnexperienced the smallest.  </p

San Bernardino was the mostrnaffordable county in the state with an index of 64 percent.  San Mateo was the least affordable at 15rnpercent.

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