LOS ANGELES , Aug. 13, 2024 /PRNewswire/ -- Higher prices combined with elevated mortgage rates that pushed borrowing costs to all-time highs pulled California's housing affordability down to the lowest levels in nearly 17 years during the second quarter of 2024, the CALIFORNIA ASSOCIATION OF REALTORS ® (C.A.
R.) said today. Infographic: https://www.
car.org/Global/Infographics/HAI-2024-Q2 Fourteen percent of the state's homebuyers could afford to purchase a median-priced, existing single-family home in California in second-quarter 2024, down from 17 percent in the first quarter of 2024 and down from 16 percent in the second quarter of 2023, according to C.A.
R.'s Traditional Housing Affordability Index (HAI). The second-quarter 2024 figure is less than a third of the affordability index peak of 56 percent in the second quarter of 2012.
Despite elevated mortgage rates in the second quarter, recent signs of weakness in macroeconomic reports have pushed rates down in the past few weeks. As the likelihood of the Fed cutting rates at the September meeting increases, housing affordability in California is expected to improve in the next quarter. 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. A minimum annual income of $236,800 was needed to qualify for the purchase of a $906,600 statewide median-priced, existing single-family home in the second quarter of 2024.
The monthly payment, including taxes and insurance (PITI) on a 30-year, fixed-rate loan, would be $5,920 , assuming a 20 percent down payment and an effective composite interest rate of 7.10 percent. The effective composite interest rate was 6.
68 percent in first-quarter 2024 and 6.61 percent in second-quarter 2023. In the second quarter of 2024, the minimum annual income required exceeded $200,000 for the sixth time in seven quarters, setting a new record high.
The monthly PITI for a typical single-family home in California also hit a record high, rising by double digits from both the previous quarter and the same quarter last year. On a year-over-year basis, statewide home prices jumped 9.0 percent from second-quarter 2023, as competition and low inventory applied upward pressure on home prices.
As the market moves past the spring home-buying season and transitions to the off season, home prices will likely decline as market competition cools and housing inventory continues to improve. A consistent drop in mortgage rates expected in the coming months will lower borrowing costs and improve affordability for the rest of the year. The share of California households that could afford a typical condo/townhome in second-quarter 2024 fell to 22 percent, down from 24 percent recorded in the previous quarter and down from the 25 percent recorded in the second quarter of 2023.
An annual income of $180,000 was required to make the monthly payment of $4,500 on the $690,000 median-priced condo/townhome in the second quarter of 2024. Compared with California , about one-third of the nation's households could afford to purchase a $422,100 median-priced home, which required a minimum annual income of $110,000 to make monthly payments of $2,750 . Nationwide affordability was down from 36 percent a year ago.
In the second quarter of 2024, the nationwide minimum required annual income was half that of California's for the fifth consecutive quarter. Key points from the second-quarter 2024 Housing Affordability report include: See C.A.
R.'s historical housing affordability data . See first-time buyer housing affordability data .
Leading the way...
® in California real estate for more than 110 years, the CALIFORNIA ASSOCIATION OF REALTORS® ( www.car.org ) is one of the largest state trade organizations in the United States with nearly 200,000 members dedicated to the advancement of professionalism in real estate.
C.A.R.
is headquartered in Los Angeles . CALIFORNIA ASSOCIATION OF REALTORS ® Traditional Housing Affordability Index Second quarter 2024 2 nd Qtr. 2024 C.
A.R. Traditional Housing Affordability Index STATE/REGION/COUNTY 2 nd Qtr.
2024 1 st Qtr. 202 2 nd Qtr. 2023 Median Home Price Monthly Payment Including Taxes & Insurance Minimum Qualifying Income Calif.
Single-family homes 14 17 16 $906,600 $5,920 $236,800 Calif. Condo/Townhomes 22 24 25 $690,000 $4,500 $180,000 Los Angeles Metro Area 13 15 17 $840,000 $5,480 $219,200 Inland Empire 20 21 22 $600,000 $3,910 $156,400 San Francisco Bay Area 18 20 19 $1,430,000 $9,330 $373,200 United States 33 37 36 $422,100 $2,750 $110,000 San Francisco Bay Area Alameda 16 16 16 $1,399,500 $9,130 $365,200 Contra Costa 21 25 23 $925,000 $6,040 $241,600 Marin 16 18 16 $1,797,000 $11,730 $469,200 Napa 14 18 19 $962,500 $6,280 $251,200 San Francisco 19 20 20 $1,701,000 $11,100 $444,000 San Mateo 16 17 17 $2,202,300 $14,370 $574,800 Santa Clara 16 18 18 $2,008,000 $13,100 $524,000 Solano 24 26 26 $600,000 $3,910 $156,400 Sonoma 16 16 16 $850,000 $5,550 $222,000 Southern California Imperial 26 30 30 $395,000 $2,580 $103,200 Los Angeles 13 14 15 $854,760 $5,580 $223,200 Orange 11 11 12 $1,437,500 $9,380 $375,200 Riverside 18 20 20 $650,000 $4,240 $169,600 San Bernardino 25 27 30 $510,000 $3,330 $133,200 San Diego 11 11 13 $1,050,000 $6,850 $274,000 Ventura 12 15 14 $940,000 $6,130 $245,200 Central Coast Monterey 8 11 12 $1,025,000 $6,690 $267,600 San Luis Obispo 11 10 11 $889,500 $5,800 $232,000 Santa Barbara 9 11 10 $1,372,500 $8,960 $358,400 Santa Cruz 13 13 13 $1,375,000 $8,970 $358,800 Central Valley Fresno 28 30 29 $425,000 $2,770 $110,800 Glenn 35 34 32 $340,450 $2,220 $88,800 Kern 30 31 31 $385,000 $2,510 $100,400 Kings 29 34 32 $380,000 $2,480 $99,200 Madera 29 30 31 $430,000 $2,810 $112,400 Merced 25 29 31 $415,000 $2,710 $108,400 Placer 28 30 29 $675,500 $4,410 $176,400 Sacramento 24 26 26 $555,000 $3,620 $144,800 San Benito 18 21 19 $805,000 $5,250 $210,000 San Joaquin 24 26 26 $550,000 $3,590 $143,600 Stanislaus 25 28 27 $489,250 $3,190 $127,600 Tulare 30 33 33 $377,000 $2,460 $98,400 Far North Butte 27 29 29 $452,470 $2,950 $118,000 Lassen 52 51 52 $249,950 $1,630 $65,200 Plumas 29 37 38 $426,000 $2,780 $111,200 Shasta 33 37 35 $379,900 $2,480 $99,200 Siskiyou 31 32 39 $332,000 $2,170 $86,800 Tehama 34 39 35 $350,000 $2,280 $91,200 Trinity 28 26 31 $304,600 $1,990 $79,600 Other Calif. Counties Amador 32 30 28 $437,450 $2,850 $114,000 Calaveras 29 33 27 $481,000 $3,140 $125,600 Del Norte 34 34 30 $345,000 $2,250 $90,000 El Dorado 22 25 23 $720,000 $4,700 $188,000 Humboldt 22 25 25 $445,000 $2,900 $116,000 Lake 31 33 28 $345,000 $2,250 $90,000 Mariposa 25 23 24 $407,780 $2,660 $106,400 Mendocino 17 21 17 $525,000 $3,430 $137,200 Mono 5 4 5 $1,088,190 $7,100 $284,000 Nevada 24 27 25 $585,000 $3,820 $152,800 Sutter 27 32 33 $440,000 $2,870 $114,800 Tuolumne 31 36 32 $437,000 $2,850 $114,000 Yolo 22 24 23 $640,000 $4,180 $167,200 Yuba 25 26 26 $446,400 $2,910 $116,400 r = revised Traditional Housing Affordability Indices (HAI) were calculated based on the following effective composite interest rates: 7.
10% (2Qtr. 2024), 6.68% (1Qtr.
2023) and 6.61% (2Qtr. 2023).
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