Housing affordability in California declined in the second quarter after reaching a four-year high in the previous quarter, according to data from the California Association of Realtors (CAR).
During the second quarter, 19% of the state’s homebuyers could afford to purchase a median-priced, existing single-family home, down from 22% in the first quarter of 2026 but up from 17% in the second quarter of 2025.
The decline occurred while the average effective mortgage rate increased for the first time in five quarters, rising to 6.54% in the second quarter of 2026 from 6.24% in the previous quarter, reaching its highest level since the third quarter of 2025. Also rising was the statewide median home price, up by 8.7% from the prior quarter to $916,750 after three consecutive quarterly declines. On a year-over-year basis, the median price rose 1.1%, marking its first annual increase following two quarters of declines.
CAR noted that a minimum annual income of $228,400 was needed to qualify for the purchase of a $916,750 statewide median-priced, existing single-family home in the second quarter of 2026. The monthly payment, including principal, interest, taxes and insurance, was $5,710, assuming a 20% down payment and an effective composite interest rate of 6.54%. The minimum qualifying income remained above $200,000 for the 14th time in the past 15 quarters.
However, more California households could afford a typical condo or townhome than a year ago, although affordability slipped from the prior quarter. CAR stated that 30% of households could afford the state’s median-priced condo or townhome in the second quarter of 2026, down from 32% in the first quarter of 2026 but up from 28% one year ago. An annual income of $166,800 was required to qualify for the monthly payment of $4,170 of a $670,000 median-priced condo or townhome.
Compared with California, nearly two-fifths (40%) of the nation’s households could afford to purchase a $434,900 median-priced home in the second quarter of 2026. A minimum annual income of $108,400 was required to make monthly payments of $2,710. Nationwide affordability declined from 44% in the prior quarter but improved from 38% in the second quarter of 2025.
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