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The percentage of home buyers who could afford to purchase a median-priced, existing single-family home in California in fourth-quarter 2014 edged up to 31 percent from the 30 percent recorded in the third quarter of 2014 but was down from a revised 32 percent in fourth-quarter 2013, according to C.A.R.’s Traditional Housing Affordability Index (HAI).  This is the seventh consecutive quarter that the index was below 40 percent and is near the mid-2008 level of 29 percent.  California’s housing affordability index hit a peak of 56 percent in the first quarter of 2012.

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 $91,550 to qualify for the purchase of a $452,140 statewide median-priced, existing single-family home in the fourth quarter of 2014.  The monthly payment, including taxes and insurance on a 30-year, fixed-rate loan, would be $2,290, assuming a 20 percent down payment and an effective composite interest rate of 4.2 percent.  The effective composite interest rate in third-quarter 2014 was 4.23 percent and 4.43 percent in the fourth quarter of 2013.

The median home price was $467,280 in third-quarter 2014, and an annual income of $94,880 was needed to purchase a home at that price.

Key points from the fourth-quarter 2014 Housing Affordability report include:

  • Compared to affordability in third-quarter 2014, 19 regions saw an improvement in housing affordability, three saw declines, and nine were unchanged.
  • Only San FranciscoMadera, and Merced counties saw a drop in affordability due to price increases from the previous quarter.
  • Santa BarbaraContra CostaNapa, and Los Angeles counties saw the greatest quarter-to-quarter improvement in housing affordability due to price declines.
  • During the fourth quarter of 2014, the five most affordable counties in California were Kings (64 percent), San Bernardino (57 percent), Tulare (56 percent), Madera (56 percent), Merced (53 percent), and Fresno (53 percent).
  • San Francisco (14 percent), San Mateo (15 percent), Marin (15 percent), and Santa Cruz (17 percent) counties were the least affordable areas of the state.

Housing Affordability slides (click link to open)

Affordability peak versus current*
Annual income peak versus current*
PITI peak versus current*

CALIFORNIA ASSOCIATION OF REALTORS®
Traditional Housing Affordability Index

STATE/REGION/COUNTY

4th Qtr.

2014

3rd Qtr.

2014

4th Qtr.

2013

California Single-family home

31

30

32

California Condo/Townhome

39

39

41

Los Angeles Metropolitan Area

34

32

34

Inland Empire

47

47

49

San Francisco Bay Area

21

21

23

United States

59

57

58

San Francisco Bay Area

Alameda

20

19

23

Contra-Costa (Central County)

23

19

24

r

Marin

15

15

19

r

Napa

24

21

29

San Francisco

14

15

16

San Mateo

15

15

16

Santa Clara

22

21

23

Solano

50

49

56

Sonoma

29

29

30

r

Southern California

Los Angeles

28

25

r

30

Orange County

21

20

20

Riverside County

41

41

43

San Bernardino

57

57

62

San Diego

27

25

28

Ventura

29

27

31

Central Coast

Monterey

27

27

29

San Luis Obispo

26

24

24

Santa Barbara

21

14

18

Santa Cruz

17

17

17

Central Valley

Fresno

53

53

55

Kings County

64

64

63

r

Madera

56

58

67

Merced

53

55

60

Placer County

45

44

47

r

Sacramento

49

48

51

Tulare

56

56

60

r = revised

CALIFORNIA ASSOCIATION OF REALTORS®
Traditional Housing Affordability Index

C.A.R. Region

4th Qtr.
Housing
Affordability Index

4th Qtr.Median Home Price

 

Monthly Payment Including Taxes & Insurance

Minimum Qualifying Annual Income

California single-family home

31

$           452,140

$               2,290

$             91,550

California Condo/Townhome

39

$           369,240

$               1,870

$             74,770

Los Angeles Metropolitan Area

34

$           414,040

$               2,100

$             83,840

Inland Empire

47

$           277,730

$               1,410

$             56,240

San Francisco Bay Area

21

$           742,880

$               3,760

$           150,420

United States

59

$           208,700

$               1,060

$             42,260

San Francisco Bay Area

Alameda

20

$           703,370

$               3,560

$           142,420

Contra-Costa (Central County)

23

$           698,300

$               3,530

$           141,400

Marin

15

$       1,009,610

$               5,110

$           204,430

Napa

24

$           581,040

$               2,940

$           117,650

San Francisco

14

$           962,390

$               4,870

$           194,870

San Mateo

15

$       1,050,000

$               5,320

$           212,610

Santa Clara

22

$           855,000

$               4,330

$           173,130

Solano

50

$           327,590

$               1,660

$             66,330

Sonoma

29

$           494,440

$               2,500

$           100,120

Southern California

Los Angeles

28

$           450,880

$               2,280

$             91,300

Orange County

21

$           688,450

$               3,490

$           139,400

Riverside County

41

$           321,610

$               1,630

$             65,120

San Bernardino

57

$           212,310

$               1,070

$             42,990

San Diego

27

$           493,110

$               2,500

$             99,850

Ventura

29

$           569,190

$               2,880

$           115,250

Central Coast

Monterey

27

$           451,550

$               2,290

$             91,430

San Luis Obispo

26

$           468,000

$               2,370

$             94,760

Santa Barbara

21

$           626,370

$               3,170

$           126,830

Santa Cruz

17

$           700,050

$               3,540

$           141,750

Central Valley

Fresno

53

$           201,840

$               1,020

$             40,870

Kings County

64

$           181,050

$                  920

$             36,660

Madera

56

$           191,250

$                  970

$             38,730

Merced

53

$           182,960

$                  930

$             37,050

Placer County

45

$           380,040

$               1,920

$             76,950

Sacramento

49

$           268,660

$               1,360

$             54,400

Tulare

56

$           180,950

$                  920

$             36,640

See C.A.R.’s historical housing affordability data.
See first-time buyer housing affordability data.

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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 175,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

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