As home price gains retreated toward the end of 2013, California’s housing affordability kept steady in the fourth quarter of 2013, following six constant quarters of downturns, the CALIFORNIA ASSOCIATION OF REALTORS ® (C.A.R.) mentioned.
The portion of home buyers who could manage to purchase a median-priced, existing single-family home in California was unchanged from the third quarter of 2013 at 32 percent, but was well below 48 percent in fourth-quarter 2012, according to C.A.R.’s Traditional Housing Affordability Index (HAI).
C.A.R.’s HAI determines the percentage of families that can afford to purchase a median-priced, single-family house in California. C.A.R. also reports affordability indices for specific areas and counties inside the state. The Index is an indication of the health of housing for home buyers in the state.
Home buyers had to earn a minimum annual income of $89,240 to qualify for the purchase of a $431,510 statewide median-priced, existing single-family house in the fourth quarter of 2013. The house payment, including taxes and insurance on a 30-year fixed-rate loan, would be $2,230, utilizing a 20 percent down payment and an effective composite rate of interest of 4.43 percent. The effective composite interest rate in third-quarter 2013 was 4.36 percent compared to 3.50 percent in the fourth quarter of 2012.
The median home price was $352,450 in fourth-quarter 2012, and a yearly income of $66,860 was needed to purchase a house at that price.
California housing affordability hit a report high of 56 percent in first quarter of 2012 but has gradually declined since then, as a lack of housing supply and high demand increased home prices dramatically and significantly decreased affordability.
At the county level, housing affordability was mixed, with cost mostly increasing or unchanged in most counties in the San Francisco Bay Area, except Sonoma County, which dropped. In Southern California, Riverside and San Bernardino counties encounter a drop in affordability as home prices have gotten better significantly. At an index of 67 percent, Madera County was the most affordable county of the state, whereas San Mateo County was the affordable at 16 percent.