The percentage of home buyers who could afford to purchase a median-priced, existing home in California last quarter shrunk to 24 percent, according to the California Association of Realtors. That’s down from 25 percent in the fourth quarter of 2021 and down from 27 percent in the first quarter of 2021.
According to CAR’s Traditional Housing Affordability Index, 2022’s Q1 figure is less than half of the affordability index peak of 56 percent in the first quarter of 2012.
Looking at an average 30-year fixed-rate mortgage rate in Q1 of 3.97 percent, a California buyer would need an annual income of at least $158,000 for the purchase of a $797,000 statewide median-priced existing home in the first quarter of 2022. The monthly payment would be $3,950, assuming a 20 percent down payment, according to CAR.
Slightly higher, 32 percent of home buyers were able to purchase the $640,000 median-priced condo or townhome in California in Q1. A minimum annual income of $126,800 was required to make a monthly payment of $3,170.
In Southern California, housing affordability worsened in all counties. Orange County was the least affordable at 13 percent, while San Bernardino County was the most affordable at 39 percent of households able to purchase the $460,000 median-priced home.
In the Bay Area, affordability declined in all nine counties. Alameda County was the least affordable with 17 percent of households able to purchase the $1,370,500 median-priced home. Solano County was the most affordable with 37 percent of households able to afford the $600,000 median-priced home.
For the state as a whole, Mono (7 percent), Santa Barbara (12 percent), Santa Cruz (13 percent) and Orange (13 percent) were the least affordable counties in California last quarter, with each requiring at least a minimum income of $205,600 to purchase a median-priced home in the county. Lassen remained the most affordable county in California in Q1, at 61 percent.