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C.A.R. Reports 4th Quarter Housing Affordability at 31%

LOS ANGELES (Feb. 12) – California housing affordability improved from third-quarter 2014 but dipped when compared to a year ago, as lower interest rates failed to offset higher home prices, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today.

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 Francisco, Madera, and Merced counties saw a drop in affordability due to price increases from the previous quarter.
  • Santa Barbara, Contra Costa, Napa, 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.


CALIFORNIA ASSOCIATION OF REALTORS®
Traditional Housing Affordability Index

C.A.R. Region Housing
Affordability Index
Median Home
Price
Monthly Payment Including Taxes & Insurance Minimum
Qualifying Income
CA SFH  31  $           452,140  $               2,290  $             91,550
CA Condo/Townhomes 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
S.F. Bay Area 21  $           742,880  $               3,760  $           150,420
US 59  $           208,700  $               1,060  $             42,260
         
S.F. 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


CALIFORNIA ASSOCIATION OF REALTORS®
Traditional Housing Affordability Index

STATE/REGION/COUNTY Q4 2014 Q3 2014   Q4 2013  
CA SFH  31 30   32  
CA Condo/Townhomes 39 39   41  
Los Angeles Metropolitan Area 34 32   34  
Inland Empire 47 47   49  
S.F. Bay Area 21 21   23  
US 59 57   58  
           
S.F. 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  

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