Housing Affordability Stabilizes in Fourth Quarter as Home Price Increases Slow, C.A.R. Reports

Business Wire

LOS ANGELES--(BUSINESS WIRE)--

As home price gains eased back toward the end of 2013, California’s housing affordability held steady in the fourth quarter of 2013, following six consecutive quarters of declines, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported.

The percentage of home buyers who could afford to purchase a median-priced, existing single-family home in California was unchanged from the third quarter of 2013 at 32 percent, but was down from 48 percent in fourth-quarter 2012, according to C.A.R.’s Traditional Housing Affordability Index (HAI).

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 $89,240 to qualify for the purchase of a $431,510 statewide median-priced, existing single-family home in the fourth quarter of 2013. The monthly payment, including taxes and insurance on a 30-year fixed-rate loan, would be $2,230, assuming a 20 percent down payment and an effective composite interest rate of 4.43 percent. The effective composite interest rate in third-quarter 2013 was 4.36 percent and 3.50 percent in the fourth quarter of 2012.

The median home price was $352,450 in fourth-quarter 2012, and an annual income of $66,860 was needed to purchase a home at that price.

California housing affordability hit a record high of 56 percent in first quarter of 2012 but has steadily declined since then, as a lack of housing supply and high demand drove up home prices sharply and significantly reduced affordability.

At the county level, housing affordability was mixed, with affordability mostly improving or unchanged in most counties in the San Francisco Bay Area, except Sonoma County, which decreased. In Southern California, Riverside and San Bernardino counties experienced a drop in affordability as home prices have recovered significantly. At an index of 67 percent, Madera County was the most affordable county of the state, while San Mateo County was the least affordable at 16 percent.

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 165,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

CALIFORNIA ASSOCIATION OF REALTORS®
Traditional Housing Affordability Index
     
STATE/REGION/COUNTY Q4 2013 Q3 2013 Q4 2012
Calif. Single-family 32 32 48
Calif. Condo/Townhome 41 41 59
Los Angeles Metro Area 34 35 50
Inland Empire 49 51 67
San Francisco Bay Area 23 21 34
United States 58 56 69
 
San Francisco Bay Area      
Alameda 23 21 36
Contra-Costa (Central Cty.) 20 18 31
Marin 18 18 28
Napa 29 28 47 r
San Francisco 16 16 22
San Mateo 16 15 24
Santa Clara 23 21 32
Solano 56 56 73
Sonoma 23 24 46
Southern California      
Los Angeles 30 27 44
Orange County 20 20 34
Riverside County 43 45 62
San Bernardino 62 64 76
San Diego 28 27 43
Ventura 31 30 48
Central Coast      
Monterey 29 30 50
San Luis Obispo 24 23 40
Santa Barbara 18 17 27
Santa Cruz 17 18 34
Central Valley      
Fresno 55 56 70
Kings County 62 62 76
Madera 67 62 74
Merced 60 60 74
Placer County 46 46 63
Sacramento 51 50 71
Tulare 60 61 71

r = revised

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 32 $431,510 $2,230 $ 89,240
Calif. Condo/Townhome 41 $345,970 $1,790 $ 71,550
Los Angeles Metro Area 34 $396,470 $2,050 $ 81,990
Inland Empire 49 $263,580 $1,360 $ 54,510
San Francisco Bay Area 23 $682,410 $3,530 $141,130
United States 58 $196,900 $1,020 $ 40,720
 
San Francisco Bay Area        
Alameda 23 $626,470 $3,240 $129,560
Contra-Costa (Central Cty.) 20 $746,380 $3,860 $154,360
Marin 18 $935,710 $4,840 $193,520
Napa 29 $494,850 $2,560 $102,340
San Francisco 16 $873,260 $4,510 $180,600
San Mateo 16 $935,000 $4,830 $193,370
Santa Clara 23 $775,000 $4,010 $160,280
Solano 56 $289,800 $1,500 $ 59,930
Sonoma 23 $466,330 $2,410 $ 96,440
Southern California        
Los Angeles 30 $423,090 $2,190 $ 87,500
Orange County 20 $666,290 $3,440 $137,800
Riverside County 43 $303,980 $1,570 $ 62,870
San Bernardino 62 $193,650 $1,000 $ 40,050
San Diego 28 $476,790 $2,470 $ 98,610
Ventura 31 $538,930 $2,790 $111,460
Central Coast        
Monterey 29 $422,250 $2,180 $ 87,330
San Luis Obispo 24 $471,960 $2,440 $ 97,610
Santa Barbara 18 $620,790 $3,210 $128,390
Santa Cruz 17 $639,000 $3,300 $132,150
Central Valley        
Fresno 55 $188,140 $ 970 $ 38,910
Kings County 62 $170,870 $ 880 $ 35,340
Madera 67 $157,140 $ 810 $ 32,500
Merced 60 $160,500 $ 830 $ 33,190
Placer County 46 $362,320 $1,870 $ 74,930
Sacramento 51 $250,360 $1,290 $ 51,780
Tulare 60 $161,200 $ 830 $ 33,340

Contact:
CALIFORNIA ASSOCIATION OF REALTORS®
Lotus Lou, (213) 739-8304
lotusl@car.org
View Comments (0)