For release: A surge in mortgage rates and elevated home prices dampened California’s housing affordability in fourth-quarter 2022, C.A.R. reports LOS ANGELES (Feb. 9) – A rapid rise in mortgage interest rates depressed housing affordability in California during the fourth quarter of 2022 and pushed the statewide affordability index for an existing, single-family home to 17 percent, just above the 15-year low of 16 percent recorded in the second quarter of 2022, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today. The percentage of home buyers who could afford to purchase a median-priced, existing single-family home in California dipped to 17 percent in fourth-quarter 2022 from 18 percent in the third quarter of 2022 and was down from 25 percent in the fourth quarter of 2021, according to C.A.R.’s Traditional Housing Affordability Index (HAI). California hit a peak high affordability index of 56 percent in the first quarter of 2012. 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 $201,200 was needed to qualify for the purchase of a $790,020 statewide median-priced, existing single-family home in the fourth quarter of 2022. The monthly payment, including taxes and insurance on a 30-year, fixed-rate loan, would be $5,030, assuming a 20 percent down payment and an effective composite interest rate of 6.80 percent. The effective composite interest rate was 5.72 percent in third-quarter 2022 and 3.28 percent in fourth-quarter 2021. While the cost of borrowing was the highest in over two decades, recent encouraging inflation data has allowed the Federal Reserve to scale down its rate hikes to 25 basis points in its latest February Federal Open Market Committee meeting. In anticipation of the Fed’s less aggressive push on rate increases in the last couple of months, the market has had less upward pressure on yields, which resulted in the average 30-year fixed-rate-mortgage (FRM) trending down since it peaked at just over 7 percent in late October/early November. The statewide median price of an existing single-family home in California dipped on a year-over-year basis in the fourth quarter of 2022 for the first time in 11 years. It also experienced the second largest quarter-to-quarter decline since the first quarter of 2011. Home prices are expected to soften further in the upcoming quarter as rates remain elevated, which will continue to put some downward pressure on housing demand. Despite a moderate quarter-to-quarter drop in the median condo/townhome price, the share of households in California that could afford to buy a median-priced condo/townhome continued to slide from last year as the cost of borrowing remained on the rise. Twenty-six percent of California households earned the minimum income to qualify for thepurchase of a $610,000 median-priced condo/townhome in the fourth quarter of 2022, which required an annual income of $155,200 to make monthly payments of $3,880. The fourth quarter 2022 figure was down from 36 percent a year ago. Nationwide housing affordability also slipped in fourth-quarter 2022. Compared with California, 38 percent of the nation’s households could afford to purchase a $378,700 median-priced home, which required a minimum annual income of $96,400 to make monthly payments of $2,410. Nationwide affordability was 51 percent a year ago. Key points from the fourth-quarter 2022 Housing Affordability report include: See C.A.R.’s historical 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 more than 214,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles. # # # CALIFORNIA ASSOCIATION OF REALTORS® 4th Quarter 2022 C.A.R. Traditional Housing Affordability Index STATE/REGION/COUNTY 4th Qtr. 2022 3rd Qtr. 2022 4th Qtr. 2021 Median Home Price Monthly Payment Including Taxes & Insurance Minimum Qualifying Income Calif. Single-family homes 17 18 25 $790,020 $5,030 $201,200 Calif. Condo/Townhomes 26 27 36 $610,000 $3,880 $155,200 Los Angeles Metro Area 18 19 26 $729,000 $4,640 $185,600 Inland Empire 23 25 35 $540,000 $3,440 $137,600 San Francisco Bay Area 20 20 23 $1,199,000 $7,630 $305,200 United States 38 39 51 $378,700 $2,410 $96,400 San Francisco Bay Area Alameda 17 17 20 $1,165,000 $7,420 $296,800 Contra Costa 25 25 33 $840,000 $5,350 $214,000 Marin 18 18 23 $1,580,000 $10,060 $402,400 Napa 16 13 24 $920,000 $5,860 $234,400 San Francisco 20 20 21 $1,575,000 $10,030 $401,200 San Mateo 19 19 19 $1,800,000 $11,460 $458,400 Santa Clara 20 20 22 $1,577,500 $10,040 $401,600 Solano 28 30 42 $569,000 $3,620 $144,800 Sonoma 17 19 28 $805,000 $5,130 $205,200 Southern California Los Angeles 13 14 r 20 r $829,130 $5,280 $211,200 Orange 13 13 17 $1,132,000 $7,210 $288,400 Riverside 21 23 32 $585,000 $3,730 $149,200 San Bernardino 29 31 42 $458,000 $2,920 $116,800 San Diego 15 15 23 $857,000 $5,460 $218,400 Ventura 16 17 24 $850,000 $5,410 $216,400 Central Coast Monterey 12 13 19 $828,000 $5,270 $210,800 San Luis Obispo 11 13 22 $843,000 $5,370 $214,800 Santa Barbara 11 12 20 $975,000 $6,210 $248,400 Santa Cruz 13 14 17 $1,275,000 $8,120 $324,800 Central Valley Fresno 30 32 40 $399,000 $2,540 $101,600 Glenn 35 34 43 $307,000 $1,950 $78,000 Kern 30 34 43 $374,900 $2,390 $95,600 Kings 35 40 54 $330,000 $2,100 $84,000 Madera 31 34 42 $410,000 $2,610 $104,400 Merced 34 34 45 $360,000 $2,290 $91,600 Placer 29 30 39 $630,000 $4,010 $160,400 Sacramento 28 29 39 $500,000 $3,180 $127,200 San Benito 18 20 27 $760,000 $4,840 $193,600 San Joaquin 28 29 38 $496,500 $3,160 $126,400 Stanislaus 29 30 40 $429,000 $2,730 $109,200 Tulare 32 36 44 $359,900 $2,290 $91,600 Far North Butte 29 30 35 $429,500 $2,730 $109,200 Lassen 54 56 63 $232,500 $1,480 $59,200 Plumas 31 28 39 $396,940 $2,530 $101,200 Shasta 39 39 45 $355,000 $2,260 $90,400 Siskiyou 31 31 44 $325,000 $2,070 $82,800 Tehama 40 39 40 $290,000 $1,850 $74,000 Other CA Counties Amador 34 34 43 $389,000 $2,480 $99,200 Calaveras 30 32 40 $440,000 $2,800 $112,000 Del Norte 25 27 39 $375,000 $2,390 $95,600 El Dorado 25 27 37 $635,000 $4,040 $161,600 Humboldt 24 23 30 $435,000 $2,770 $110,800 Lake 28 33 43 $349,900 $2,230 $89,200 Mariposa 27 21 30 $359,000 $2,290 $91,600 Mendocino 14 18 22 $562,500 $3,580 $143,200 Mono 7 8 13 $825,000 $5,250 $210,000 Nevada 27 25 37 $526,000 $3,350 $134,000 Sutter 34 32 41 $405,950 $2,580 $103,200 Tuolumne 36 35 45 $378,000 $2,410 $96,400 Yolo 24 24 33 $600,000 $3,820 $152,800 Yuba 30 29 36 $400,000 $2,550 $102,000 Traditional Housing Affordability Indices (HAI) were calculated based on the following effective composite interest rates: 6.80% (4Qtr. 2022), 5.72% (3Qtr. 2022) and 3.28% (4Qtr. 2021).
February 9, 2023
See first-time buyer housing affordability data.
Traditional Housing Affordability Index
Fourth quarter 2022
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