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Higher home prices driven by dearth of inventory depresses California housing affordability in third-quarter 2020, C.A.R. reports


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iCrowdNewswire   Nov 17, 2020  12:10 PM ET

Double-digit home price increases fueled by a shortage of homes for sale pushed California’s third quarter housing affordability to its lowest level in nearly two years, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) https://www.car.org/ said today.

The percentage of home buyers who could afford to purchase a median-priced, existing single-family home in California in third-quarter 2020 fell to 28 percent from 33 percent in the second quarter of 2020 and was down from 31 percent in the third quarter a year ago, according to C.A.R.’s Traditional Housing Affordability Index. The third-quarter 2020 figure was the lowest since the fourth quarter of 2018. California’s housing affordability index hit a peak of 56 percent in the third quarter of 2012.

C.A.R.’s Housing Affordability Index (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 $127,200 was needed to qualify for the purchase of a $693,680 statewide median-priced, existing single-family home in the third quarter of 2020. The monthly payment, including taxes and insurance on a 30-year, fixed-rate loan, would be $3,180, assuming a 20 percent down payment and an effective composite interest rate of 3.15 percent. The effective composite interest rate was 3.43 percent in second-quarter 2020 and 3.85 percent in third-quarter 2019. 

Housing affordability for condominiums and townhomes also dropped from second-quarter 2020, with two in five (42 percent) California households earning the minimum income to qualify for the purchase of a $512,000 median-priced condominium/townhome. An annual income of $94,000 was required to make monthly payments of $2,350. Forty-three percent of households could afford to buy a median-priced condominium/townhome a year ago.

Compared with California, more than half of the nation’s households (55 percent) could afford to purchase a $313,500 median-priced home, which required a minimum annual income of $57,600 to make monthly payments of $1,440.

Multimedia/Historical data:

Key points from the third-quarter 2020 Housing Affordability report include:



Contact Information:

https://www.car.org








Tags:    Wire Real Estate, Wire, United States, English