Housing affordability in California reached a low not seen in 16 years last quarter, according to the California Association of Realtors. CAR found that just 15 percent of California households could afford to purchase the state’s median-priced home—$843,600—in the third quarter of 2023. That Q3 figure is less than a third of the affordability index peak high of 56 percent in the first quarter of 2012.
A minimum annual income of $221,200 was needed to qualify for the purchase of the statewide median-priced, existing single-family home in the third quarter of 2023. The monthly payment, including taxes and insurance on a 30-year, fixed-rate loan, would be $5,530, assuming a 20 percent down payment and an effective composite interest rate of 7.14 percent.
The share of households that could afford a typical condo/townhome in Q3 dipped from the 25 percent recorded in the previous quarter to 23 percent. An annual income of $170,400 was required to make the monthly payment of $4,260 on the $650,000 median-priced condo/townhome in the third quarter of 2023.
Mono, Monterey, San Luis Obispo and Santa Barbara were the least affordable counties in California last quarter, with each of requiring at least a minimum income of $226,800 to purchase a median-priced home in the county. Lassen remained the most affordable county in California and the only county to record an affordability of more than 50 percent in the third quarter of 2023.