Some 20 percent of California households could afford to purchase the $760,260 median-priced home in the first quarter of 2023, according to the California Association of Realtors. That’s up from 17 percent in the fourth quarter of 2022 and down from 24 percent compared to Q1 of 2022.
Any way you shake it, California remains a competitive market where housing affordability remains a challenge for most.
According to CAR, a minimum annual income of $188,400 was needed to make monthly payments of $4,710, including principal, interest and taxes on a 30-year fixed-rate mortgage at a 6.48 percent interest rate.
Lassen remained the most affordable county in California in the first quarter of 2023, followed by Plumas and Siskiyou. The least affordable counties in California were Mono (just 7 percent) and a three-way tie between San Luis Obispo, Monterey and Orange, all at 12 percent. Each of those four counties required a minimum annual income of at least $208,000 to purchase a median-priced home in the respective counties.
Two counties Bay Area counties continued to require the highest minimum qualifying income to buy a median-priced home in the first quarter of 2023. San Mateo and Santa Clara counties required a minimum qualifying income of $458,400 and $401,200, respectively.
Looking ahead, CAR has also revised its 2023 Housing Market Forecast and projects existing single-family home sales to reach 279,900 units in 2023, a decline of 18.2 percent from the 342,000 units sold in 2022. The California median home price is projected to decrease 5.6 percent to $776,600 in 2023, down from the annual median price of $822,300 recorded in 2022.
The updated projection on the statewide median price is an increase from the estimate of $758,600 forecast last October.