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C.A.R. Reports Fourth Quarter Housing Affordability

Housing affordability stabilizes in fourth quarter as home price increases slow

As home price gains eased back toward the end of 2013, California’s housing affordability held steady in the fourth quarter of 2013, following six consecutive quarters of declines, the CALIFORNIA ASSOCIATION OF REALTORS (C.A.R.) reported.

The percentage of home buyers who could afford to purchase a median-priced, existing single-family home in California was unchanged from the third quarter of 2013 at 32 percent, but was down from 48 percent in fourth-quarter 2012, according to C.A.R.’s Traditional Housing Affordability Index (HAI).

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 $89,240 to qualify for the purchase of a $431,510 statewide median-priced, existing single-family home in the fourth quarter of 2013. The monthly payment, including taxes and insurance on a 30-year fixed-rate loan, would be $2,230, assuming a 20 percent down payment and an effective composite interest rate of 4.43 percent. The effective composite interest rate in third-quarter 2013 was 4.36 percent and 3.50 percent in the fourth quarter of 2012.

The median home price was $352,450 in fourth-quarter 2012, and an annual income of $66,860 was needed to purchase a home at that price.

California housing affordability hit a record high of 56 percent in first quarter of 2012 but has steadily declined since then, as a lack of housing supply and high demand drove up home prices sharply and significantly reduced affordability.

At the county level, housing affordability was mixed, with affordability mostly improving or unchanged in most counties in the San Francisco Bay Area, except Sonoma County, which decreased. In Southern California, Riverside and San Bernardino counties experienced a drop in affordability as home prices have recovered significantly. At an index of 67 percent, Madera County was the most affordable county of the state, while San Mateo County was the least affordable at 16 percent.

STATE/REGION/COUNTY Q4 2013 Q3 2013   Q4 2012  
CA Single Family  32 32   48  
CA Condo/Townhomes 41 41   59  
Los Angeles Metropolitan Area 34 35   50  
Inland Empire 49 51   67  
S.F. Bay Area 23 21   34  
US 58 56   69  
           
S.F. Bay Area          
Alameda 23 21   36  
Contra-Costa (Central County) 20 18   31  
Marin 18 18   28  
Napa 29 28   47 r
San Francisco 16 16   22  
San Mateo 16 15   24  
Santa Clara 23 21   32  
Solano 56 56   73  
Sonoma 23 24   46  
Southern California          
Los Angeles 30 27   44  
Orange County 20 20   34  
Riverside County 43 45   62  
San Bernardino 62 64   76  
San Diego 28 27   43  
Ventura 31 30   48  
Central Coast          
Monterey 29 30   50  
San Luis Obispo 24 23   40  
Santa Barbara 18 17   27  
Santa Cruz 17 18   34  
Central Valley          
Fresno 55 56   70  
Kings County 62 62   76  
Madera 67 62   74  
Merced 60 60   74  
Placer County 46 46   63  
Sacramento 51 50   71  
Tulare 60 61   71  

C.A.R. Region Housing
Affordability Index
Median Home
Price
Monthly Payment Including Taxes & Insurance Minimum
Qualifying Income
CA Single Family  32  $        431,510  $         2,230  $         89,240
CA Condo/Townhomes 41  $        345,970  $         1,790  $         71,550
Los Angeles Metropolitan Area 34  $        396,470  $         2,050  $         81,990
Inland Empire 49  $        263,580  $         1,360  $         54,510
S.F. Bay Area 23  $        682,410  $         3,530  $        141,130
U.S. 58  $        196,900  $         1,020  $         40,720
         
S.F. Bay Area        
Alameda 23  $        626,470  $         3,240  $        129,560
Contra-Costa (Central County) 20  $        746,380  $         3,860  $        154,360
Marin 18  $        935,710  $         4,840  $        193,520
Napa 29  $        494,850  $         2,560  $        102,340
San Francisco 16  $        873,260  $         4,510  $        180,600
San Mateo 16  $        935,000  $         4,830  $        193,370
Santa Clara 23  $        775,000  $         4,010  $        160,280
Solano 56  $        289,800  $         1,500  $         59,930
Sonoma 23  $        466,330  $         2,410  $         96,440
Southern California        
Los Angeles 30  $        423,090  $         2,190  $         87,500
Orange County 20  $        666,290  $         3,440  $        137,800
Riverside County 43  $        303,980  $         1,570  $         62,870
San Bernardino 62  $        193,650  $         1,000  $         40,050
San Diego 28  $        476,790  $         2,470  $         98,610
Ventura 31  $        538,930  $         2,790  $        111,460
Central Coast        
Monterey 29  $        422,250  $         2,180  $         87,330
San Luis Obispo 24  $        471,960  $         2,440  $         97,610
Santa Barbara 18  $        620,790  $         3,210  $        128,390
Santa Cruz 17  $        639,000  $         3,300  $        132,150
Central Valley        
Fresno 55  $        188,140  $         970  $         38,910
Kings County 62  $        170,870  $         880  $         35,340
Madera 67  $        157,140  $         810  $         32,500
Merced 60  $        160,500  $         830  $         33,190
Placer County 46  $        362,320  $         1,870  $         74,930
Sacramento 51  $        250,360  $         1,290  $         51,780
Tulare 60  $        161,200  $         830  $         33,340

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