The housing affordability index, which measures the percentage of all households that can afford to purchase a median-priced single-family home in California, fell in the second quarter, the California Association of Realtors reported today.
Lower interest rates in the second quarter of 2014 failed to offset continued home price increases, lowering housing affordability around the state, CAR said in a statement.
The percentage of home buyers who could afford to purchase a median-priced existing single-family home in California fell from 33 percent in the first quarter of 2014 to 30 percent in the second quarter and was down from 36 percent in the second quarter of 2013, according to CAR’s Traditional Housing Affordability Index.
In the second quarter, home buyers needed to earn a minimum annual income of $93,590 to qualify for the purchase of a $457,140 single-family home.
The monthly payment, including taxes and insurance on a 30-year fixed-rate loan, would be $2,340, assuming a 20 percent down payment and an effective composite interest rate of 4.32 percent.
The median home price was $416,720 in the first quarter of 2014, and an annual income of $86,420 was needed to purchase a home at that price.
During the second quarter of 2014, the three most affordable counties in California were Kings (64 percent), San Bernardino (58 percent), and Merced (57 percent). The least affordable counties were San Francisco, San Mateo, and Marin (all at 14 percent), CAR said.
Only Monterey County experienced an improvement in housing affordability from the previous quarter, largely due to a lower median home price, according to Los Angeles-based CAR.