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Housing affordability in California fell to the lowest level in nearly 16 years as interest rates remained above 6 percent for the third straight quarter and home prices remained high due to the limited supply of homes on the market, the California Association of Realtors reported today. Fewer than one in five home buyers, or 16 percent, could afford to buy a median-priced existing single-family home in the state in the second quarter of 2023. This is down from 19 percent in the first quarter.
A minimum annual income of $208,000 was needed to make the monthly payments of $5,200 for a $830,620 median priced home, CAR said. The monthly payment included principal, interest and taxes with a 30-year-fixed rate mortgage at 6.61 per cent interest rate. The $5,200 payment also assumes a 20-percent downpayment.
In Contra Costa County, a home buyer needed a minimum income of $225,000 to purchase the average median home of $900,000 with monthly payments of $5,640, according to CAR. The Bay Area county with the highest median home price in the second quarter was San Mateo, coming in at $2,012,500 which would require a minimum income of $504,400.
