The decline in affordable homeownership opportunities impacted all racial and ethnic demographics in California’s housing market during 2022, according to new data released by the California Association of Realtors (CAR).
Last year, only 21% of all Californians earned the minimum income needed to purchase a home in 2022, down from 27% in 2021. CAR reported that housing affordability for White/non-Hispanic households dropped to 26% in 2022 from 32% in 2021, while only 12% of Black and Hispanic households could afford the same median-priced home last year down from 16% and 17% in 2021, respectively. For the state’s Asian population, only 31% could afford the median-priced home in 2022, down from 38% in 2021.
CAR pointed out the housing affordability gap between Blacks and the overall population in California improved from 11.7 percentage points in 2021 to 9.8 percentage points in 2022, and the gap for Hispanics/Latinos improved from 10.5 percentage points in 2021 to 9.4 percentage points in 2022. CAR also cited the U.S. Census Bureau’s American Community Survey in observing the 2021 homeownership rate for all Californians was 55%, 63% for Whites, 60% for Asians, 44% for Hispanics and 37% for Blacks.
CAR added that a minimum annual income of $186,800 was needed to qualify for the purchase of a $822,320 statewide median-priced, existing single-family home in 2022. The monthly payment, including taxes and insurance on a 30-year, fixed-rate loan, would be $4,670, assuming a 20% down payment and an effective composite interest rate of 5.47%. The 2022 California median income for Whites was $105,640, $120,040 for Asians, $76,310 for Hispanics/Latinos and $64,190 for Blacks — an income gap of nearly one-third that of the overall population, which was $93,380.