While Housing Affordability Improves, Most Are Still Priced Out in Southern California

LOS ANGELES, CA - The housing affordability rate is improving in California, thanks to strong wage growth and lower home prices, the California Association of Realtors reported today.

Thirty-four percent of California households could afford to purchase the $465,280 median-priced home in the first quarter, up from 30 percent in fourth-quarter 2015 and unchanged from 34 percent in first-quarter 2015, a CAR statement said.

A minimum annual income of $92,571 was needed to make monthly payments of $2,314, including principal, interest, and taxes on a 30-year fixed-rate mortgage at 4.01 percent interest rate.

Forty-one percent of home buyers were able to purchase the $389,910 median-priced condo or townhome. An annual income of $77,575 was required to make a monthly payment of $1,939.

"This is the 12th consecutive quarter that the index has been below 40 percent and is near the mid-2008 low level of 29 percent. California's housing affordability index hit a peak of 56 percent in the first quarter of 2012," the statement said.

City News Service