Only 16% of the California’s homebuyers could afford to purchase a median-priced, existing single-family home during the third quarter. But according to the California Association of Realtors’ (CAR) Traditional Housing Affordability Index, this is a mild improvement – the third quarter share is up from 14% in the second quarter and from 15% percent in the third quarter of 2023.
The third-quarter 2024 figure is less than a third of the affordability index peak of 56% in the third quarter of 2012.
CAR reported state residents needed a minimum annual income of $220,800 to qualify for the purchase of an $880,250 statewide median-priced, existing single-family home in the third quarter. The monthly payment – including taxes and insurance (PITI) on a 30-year, fixed-rate loan – would be $5,520, assuming a 20% down payment and an effective composite interest rate of 6.63%.
The statewide median price of existing single-family homes in California declined 2.9% quarter-to-quarter, although on a year-over-year basis California continued to record price increases for the fifth consecutive quarter, albeit at a more moderate pace of 4.3% in the third quarter.
The share of California households that could afford a typical condo/townhome in third-quarter 2024 rose to 25%, up from 22% recorded in the previous quarter and up from the 23% from one year earlier. An annual income of $168,000 was required to make the monthly payment of $4,200 on the $670,000 median-priced condo/townhome in the third quarter.
Compared with California, more than one-third of the nation’s households could afford to purchase a $418,700 median-priced home, which required a minimum annual income of $105,200 to make monthly payments of $2,630.
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