Home Ownership is Out of Reach for Majority of Californians
Less than 33% of California residents earn enough money to afford the cost of a Golden State home.
Lower interest rates failed to offset strong seasonal price increases, making it harder for Californians to purchase a home in Q-2 of Y 2016, the California Association of Realtors said Wednesday.
The percentage of home buyers who could afford to purchase a median priced existing single-family residence in California in Q-2 fell to 31% from the 34% recorded in Q-1 and was up from 30% in Q-2 of Y 2015, according to CAR’s Traditional Housing Affordability Index.
This is the 13th Quarter running that the index has been below 40%. It is near the mid-2008 low level of 29%, according to CAR. California’s housing affordability index hit a peak of 56% in Q-1 of Y 2012.
CAR’s Housing Affordability Index measures the percentage of all households that can afford to purchase a median-priced single-family home in California. The Index is considered the most fundamental measure of housing well-being for home buyers in the state, according to Los Angeles-based CAR.
Condominiums and townhomes also were slightly less affordable than in the previous Quarter.
About 40% of California households earned the minimum income to qualify for the purchase of a condominium or townhome in Q-2 of Y 2016, down from 41% in Q-1. An annual income of $80,663 was required to make monthly payments of $2,017.