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2nd Qtr. California housing affordability

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For release:
August 13, 2024

 Higher home prices and elevated mortgage rates push California housing affordability to near-17-year low in second-quarter 2024, C.A.R. reports

  • Fourteen percent of California households could afford to purchase the $906,600 median-priced home in the second quarter of 2024, down from 17 percent in first-quarter 2024 and down from 16 percent in second-quarter 2023.

  • A minimum annual income of $236,800 was needed to make monthly payments of $5,920, including principal, interest and taxes on a 30-year fixed-rate mortgage at a 7.10 percent interest rate.

  • Twenty-two percent of home buyers were able to purchase the $690,000 median-priced condo or townhome. A minimum annual income of $180,000 was required to make a monthly payment of $4,500.

 LOS ANGELES (Aug. 13) – LOS ANGELES (Aug. 13) – Higher prices combined with elevated mortgage rates that pushed borrowing costs to all-time highs pulled California’s housing affordability down to the lowest levels in nearly 17 years during the second quarter of 2024, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today.

Infographic: https://www.car.org/Global/Infographics/HAI-2024-Q2

Fourteen percent of the state’s homebuyers could afford to purchase a median-priced, existing single-family home in California in second-quarter 2024, down from 17 percent in the first quarter of 2024 and down from 16 percent in the second quarter of 2023, according to C.A.R.’s Traditional Housing Affordability Index (HAI).

The second-quarter 2024 figure is less than a third of the affordability index peak of 56 percent in the second quarter of 2012. Despite elevated mortgage rates in the second quarter, recent signs of weakness in macroeconomic reports have pushed rates down in the past few weeks. As the likelihood of the Fed cutting rates at the September meeting increases, housing affordability in California is expected to improve in the next quarter.

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 $236,800 was needed to qualify for the purchase of a $906,600 statewide median-priced, existing single-family home in the second quarter of 2024. The monthly payment, including taxes and insurance (PITI) on a 30-year, fixed-rate loan, would be $5,920, assuming a 20 percent down payment and an effective composite interest rate of 7.10 percent. The effective composite interest rate was 6.68 percent in first-quarter 2024 and 6.61 percent in second-quarter 2023.

In the second quarter of 2024, the minimum annual income required exceeded $200,000 for the sixth time in seven quarters, setting a new record high. The monthly PITI for a typical single-family home in California also hit a record high, rising by double digits from both the previous quarter and the same quarter last year.

On a year-over-year basis, statewide home prices jumped 9.0 percent from second-quarter 2023, as competition and low inventory applied upward pressure on home prices. As the market moves past the spring home-buying season and transitions to the off season, home prices will likely decline as market competition cools and housing inventory continues to improve. A consistent drop in mortgage rates expected in the coming months will lower borrowing costs and improve affordability for the rest of the year.

The share of California households that could afford a typical condo/townhome in second-quarter 2024 fell to 22 percent, down from 24 percent recorded in the previous quarter and down from the 25 percent recorded in the second quarter of 2023. An annual income of $180,000 was required to make the monthly payment of $4,500 on the $690,000 median-priced condo/townhome in the second quarter of 2024.

Compared with California, about one-third of the nation’s households could afford to purchase a $422,100 median-priced home, which required a minimum annual income of $110,000 to make monthly payments of $2,750. Nationwide affordability was down from 36 percent a year ago.

In the second quarter of 2024, the nationwide minimum required annual income was half that of California's for the fifth consecutive quarter.

Key points from the second-quarter 2024 Housing Affordability report include:

  • When compared to Q124, housing affordability in Q224 declined in 40 counties and remained unchanged in six. Seven counties showed quarter-to-quarter improvement in affordability mainly due to price declines in those counties. When compared to a year ago, six counties registered an improvement in affordability, while 39 counties throughout the state posted a decline on a year-over-year basis, and eight remained unchanged.

  • Lassen (52 percent) remained the most affordable county in California, followed by Glenn (35 percent), Del Norte (34 percent), and Tehama (34 percent). Of all counties in California, Lassen continued to have the lowest minimum qualifying income ($65,200) to purchase a median-priced home in in second-quarter 2024.

  • Mono (5 percent), Monterey (8 percent), and Santa Barbara (9 percent) were the least affordable counties in California, with each of the counties requiring a minimum income of at least $267,600 to purchase a median-priced home in the respective counties. San Mateo continued to require the highest minimum qualifying income ($574,800) to buy a median-priced home in the second quarter of 2024 and, together with Santa Clara ($524,000), were the only two counties in California with a minimum qualifying income more than $500,000. Marin and San Francisco came in third and fourth, requiring a minimum income of $469,200 and $444,000, respectively.

  • Housing affordability declined the most on a year-over-year basis in Plumas, falling nine points from the previous year. Siskiyou recorded the second largest drop in affordability, moving seven percentage points below the same quarter of last year. Merced and Sutter had the third worst drop in affordability, decreasing six percentage points each from a year ago. Despite higher household income, higher home prices and elevated mortgage rates continue to keep housing affordability near its all-time lows across most counties.

See C.A.R.’s historical housing affordability data.
See first-time buyer 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 nearly 200,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

# # #

CALIFORNIA ASSOCIATION OF REALTORS®

Traditional Housing Affordability Index
Second quarter 2024

2nd Qtr. 2024

C.A.R. Traditional Housing Affordability Index

STATE/REGION/COUNTY

2nd Qtr. 2024

1st Qtr.

202

 

2nd Qtr. 2023

Median Home Price

Monthly Payment Including Taxes & Insurance

Minimum Qualifying Income

Calif. Single-family homes

14

17

 

16

 

$906,600

$5,920

$236,800

Calif. Condo/Townhomes

22

24

 

25

 

$690,000

$4,500

$180,000

Los Angeles Metro Area

13

15

 

17

 

$840,000

$5,480

$219,200

Inland Empire

20

21

 

22

 

$600,000

$3,910

$156,400

San Francisco Bay Area

18

20

 

19

 

$1,430,000

$9,330

$373,200

United States

33

37

 

36

 

$422,100

$2,750

$110,000

 

 

 

 

 

 

 

 

 

San Francisco Bay Area

 

 

 

 

 

 

 

 

Alameda

16

16

 

16

 

$1,399,500

$9,130

$365,200

Contra Costa

21

25

 

23

 

$925,000

$6,040

$241,600

Marin

16

18

 

16

 

$1,797,000

$11,730

$469,200

Napa

14

18

 

19

 

$962,500

$6,280

$251,200

San Francisco

19

20

 

20

 

$1,701,000

$11,100

$444,000

San Mateo

16

17

 

17

 

$2,202,300

$14,370

$574,800

Santa Clara

16

18

 

18

 

$2,008,000

$13,100

$524,000

Solano

24

26

 

26

 

$600,000

$3,910

$156,400

Sonoma

16

16

 

16

 

$850,000

$5,550

$222,000

Southern California

 

 

 

 

 

 

 

 

Imperial

26

30

 

30

 

$395,000

$2,580

$103,200

Los Angeles

13

14

 

15

 

$854,760

$5,580

$223,200

Orange

11

11

 

12

 

$1,437,500

$9,380

$375,200

Riverside

18

20

 

20

 

$650,000

$4,240

$169,600

San Bernardino

25

27

 

30

 

$510,000

$3,330

$133,200

San Diego

11

11

 

13

 

$1,050,000

$6,850

$274,000

Ventura

12

15

 

14

 

$940,000

$6,130

$245,200

Central Coast

 

 

 

 

 

 

 

 

Monterey

8

11

 

12

 

$1,025,000

$6,690

$267,600

San Luis Obispo

11

10

 

11

 

$889,500

$5,800

$232,000

Santa Barbara

9

11

 

10

 

$1,372,500

$8,960

$358,400

Santa Cruz

13

13

 

13

 

$1,375,000

$8,970

$358,800

Central Valley

 

 

 

 

 

 

 

 

Fresno

28

30

 

29

 

$425,000

$2,770

$110,800

Glenn

35

34

 

32

 

$340,450

$2,220

$88,800

Kern

30

31

 

31

 

$385,000

$2,510

$100,400

Kings

29

34

 

32

 

$380,000

$2,480

$99,200

Madera

29

30

 

31

 

$430,000

$2,810

$112,400

Merced

25

29

 

31

 

$415,000

$2,710

$108,400

Placer

28

30

 

29

 

$675,500

$4,410

$176,400

Sacramento

24

26

 

26

 

$555,000

$3,620

$144,800

San Benito

18

21

 

19

 

$805,000

$5,250

$210,000

San Joaquin

24

26

 

26

 

$550,000

$3,590

$143,600

Stanislaus

25

28

 

27

 

$489,250

$3,190

$127,600

Tulare

30

33

 

33

 

$377,000

$2,460

$98,400

Far North

 

 

 

 

 

 

 

 

Butte

27

29

 

29

 

$452,470

$2,950

$118,000

Lassen

52

51

 

52

 

$249,950

$1,630

$65,200

Plumas

29

37

 

38

 

$426,000

$2,780

$111,200

Shasta

33

37

 

35

 

$379,900

$2,480

$99,200

Siskiyou

31

32

 

39

 

$332,000

$2,170

$86,800

Tehama

34

39

 

35

 

$350,000

$2,280

$91,200

Trinity

28

26

 

31

 

$304,600

$1,990

$79,600

Other Calif. Counties

 

 

 

 

 

 

 

 

Amador

32

30

 

28

 

$437,450

$2,850

$114,000

Calaveras

29

33

 

27

 

$481,000

$3,140

$125,600

Del Norte

34

34

 

30

 

$345,000

$2,250

$90,000

El Dorado

22

25

 

23

 

$720,000

$4,700

$188,000

Humboldt

22

25

 

25

 

$445,000

$2,900

$116,000

Lake

31

33

 

28

 

$345,000

$2,250

$90,000

Mariposa

25

23

 

24

 

$407,780

$2,660

$106,400

Mendocino

17

21

 

17

 

$525,000

$3,430

$137,200

Mono

5

4

 

5

 

$1,088,190

$7,100

$284,000

Nevada

24

27

 

25

 

$585,000

$3,820

$152,800

Sutter

27

32

 

33

 

$440,000

$2,870

$114,800

Tuolumne

31

36

 

32

 

$437,000

$2,850

$114,000

Yolo

22

24

 

23

 

$640,000

$4,180

$167,200

Yuba

25

26

 

26

 

$446,400

$2,910

$116,400

 

r = revised

Traditional Housing Affordability Indices (HAI) were calculated based on the following effective composite interest rates: 7.10% (2Qtr. 2024), 6.68% (1Qtr. 2023) and 6.61% (2Qtr. 2023).


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