Significantly higher home prices, particularly in the San Francisco Bay Area and coastal regions, shut out more home buyers in the state during the second quarter of 2013, 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 dropped to 36 percent in the second quarter of 2013, down from 44 percent in first-quarter 2013 and from 51 percent in second-quarter 2012, according to C.A.R.’s Traditional Housing Affordability Index (HAI). The second quarter 2013 figure fell below 40 percent for the first time since the third quarter of 2008.
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 $79,910 to qualify for the purchase of a $415,770 statewide median-priced, existing single-family home in the second quarter of 2013. The monthly payment, including taxes and insurance on a 30-year fixed-rate loan, would be $2,000, assuming a 20 percent down payment and an effective composite interest rate of 3.64 percent. The effective composite interest rate in first-quarter 2013 was 3.55 percent and 2.82 percent in the second quarter of 2012.
The median home price was $316,490 in second-quarter 2012, and an annual income of $62,440 was needed to purchase a home at that price.
Nearly all regions of the state experienced sharp quarter-over-quarter declines in housing affordability, with Bay Area and coastal regions recording the greatest decreases in the index due to significantly higher home prices.
At an index of 71 percent, Madera County was the most affordable county of the state, while San Francisco and San Mateo counties tied for the least affordable at 17 percent.