California's housing affordability held steady in the third quarter, unchanged from the previous quarter, according to the California Association of Realtors. Compared with second-quarter 2016, 13 of 29 counties tracked saw an improvement in housing affordability. Seven of nine Bay Area counties recorded higher affordability numbers than the previous quarter, while affordability results in Southern California and Central Valley regions were mixed.
The percentage of home buyers who could afford to purchase a median-priced, existing single-family home in California in third-quarter 2016 remained at 31 percent, unchanged from the second quarter of 2016 but was up from 29 percent in third-quarter 2015, according to the state Realtor group's Traditional Housing Affordability Index. California's housing affordability index hit a peak of 56 percent in the second quarter of 2012.
California home buyers needed to earn a minimum annual income of $100,290 to qualify for the purchase of a $515,940 statewide median-priced, existing single-family home in the third quarter of 2016. The monthly payment, including taxes and insurance, on a 30-year, fixed-rate loan, would be $2,510, assuming a 20 percent down payment and an effective composite interest rate of 3.76 percent.
Counties that saw an improvement in housing affordability were Alameda, Contra Costa, Marin, San Francisco, San Mateo, Santa Clara, Sonoma, Orange County, Riverside County, Ventura, Santa Cruz, Kern, and Kings. Counties that saw a decline in affordability were Los Angeles, San Bernardino, San Luis Obispo, Madera, Merced, San Joaquin, and Tulare. The counties of Napa, Solano, San Diego, Monterey, Santa Barbara, Fresno, Placer, Sacramento and Stanislaus saw their affordability index unchanged. The most affordable counties in California were Kings (57 percent); Kern (56 percent); San Bernardino (55 percent); and Fresno and Merced, both at 50 percent.
Although housing affordability improved from the previous quarter, San Francisco (14 percent), San Mateo (15 percent), and Marin (19 percent) counties were still the least affordable areas in the state in third-quarter 2016. Santa Clara County followed at 22 percent.
Santa Clara County home buyers needed to earn a minimum annual income of $194,380 to qualify for the purchase of a $1,000,000 median-priced, existing single-family home in the third quarter of 2016. The monthly payment, including taxes and insurance on a 30-year, fixed-rate loan would be $4,860, assuming a 20 percent down payment and an interest rate of 3.76 percent.
"The housing affordability level in the Silicon Valley region will continue to be tough compared to other counties because of the competition among buyers for the limited inventory. We expect to see more of the same next year as the workforce in the region continues to expand," said Karen Trolan, president of the Silicon Valley Association of Realtors.
The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.
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