New data from the California Association of Realtors (CAR) has determined 18% of the state’s homebuyers could afford to purchase a median-priced, existing single-family home during fourth quarter of 2025, up from 17% in the third quarter and up from 16% in the fourth quarter of 2024. However, the fourth quarter figure was less than one-third of the affordability index peak of 56% in the fourth quarter of 2012.
The median price of an existing single-family home in California declined by 2.2% in the fourth quarter. This marked the second straight quarter with a median price drop. On a year-over-year basis, California recorded its first annual price decline since the second quarter of 2023, falling 0.6% below the year-ago level.
CAR noted that buyers needed a minimum annual income of $213,000 to afford the $5,330 monthly payment, including principal, interest, and taxes on a 30-year fixed-rate mortgage at 6.35%. While the fourth quarter’s annual required income was $23,600 below the record high set in second quarter of 2024, it still marked the 12th of the past 13 quarters with income requirements above $200,000.
More California households (28%) could afford a typical condo/townhome in the fourth quarter, rising from 27% in the prior quarter and from 25% one year before. An annual income of $159,200 was required to make the monthly payment of $3,980 on the $650,000 median-priced condo/townhome in the fourth quarter of 2025.
In comparison, more than one-third (39%) of the nation’s households could afford to purchase a $414,900 median-priced home, which required a minimum annual income of $101,600 to make monthly payments of $2,540. Nationwide, affordability edged up from 36% in both the third quarter and from one year earlier.
