California home affordability improved slightly in the third quarter, with 17% of households able to buy a median-priced single-family home, according to the California Association of Realtors (CAR). The share rose from 15% in the previous quarter and 16% a year earlier, although it remains far below the 56% peak recorded in the third quarter of 2012.
CAR said the improvement was helped by mortgage rates falling to a one-year low. The average rate in the third quarter was 6.67%, down from 6.90% in the previous quarter and slightly above 6.63% a year earlier.
The median price of an existing single-family home in California was $887,380, a 2.0% drop from the previous quarter as easing competition and increased supply helped limit price growth. Compared with a year earlier, prices rose 0.8%.
The estimated monthly payment for a median-priced home, including taxes and insurance, was $5,590. Based on the common guideline that housing costs should not exceed 30% of income, a minimum annual income of $223,600 was required. Calculations used a 20% down payment and a 30-year fixed-rate mortgage.
California’s 17% affordability level remains far below the national figure. Across the U.S., buyers needed an annual income of $107,600 to purchase a $426,800 median-priced home, with monthly payments around $2,690. Nationally, 36% of households could afford a median-priced home—more than double California’s share.
In the Los Angeles metro area, 16% of households earned the $210,800 needed to buy a median-priced home at $837,060, up from 14% in the previous quarter and 15% a year earlier.
Affordability varied by county. In Los Angeles County, only 12% met the required $240,400 income for a median price of $954,130. In Orange County, the median price reached $1.4 million, with 13% able to afford payments of $8,820, requiring an income of $352,800.
Affordability was strongest in San Bernardino County, where 29% of households could buy a median-priced home, and in Riverside County, where the share was 23%. San Diego County and Ventura County both recorded affordability levels near 13–16%, with median prices of $1,009,500 and $926,000, respectively.
In its report, CAR said prices are likely to remain softer during the seasonal slowdown. The group noted that additional rate declines and improved economic stability could further ease the path for prospective homebuyers.
BY HOONSIK WOO [woo.hoonsik@koreadaily.com]
