Housing affordability plummets in state
California’s post-recession moment for housing affordability appears to be ending fast.
Rising home prices in the San Francisco Bay Area and other coastal markets rapidly shut out a huge chunk of the state’s home-buying population last quarter, according to data published by the California Assn. of Realtors. Rising mortgage interest rates also didn’t help.
The rise in interest rates will probably keep home prices from skyrocketing, but price appreciation is likely to continue, said Leslie Appleton-Young, chief economist for the association. That means housing affordability won’t be coming back anytime soon.
“It is going to continue deteriorate, but perhaps at a lower-rate,” Appleton-Young said. “I do think you are going to see a cooling off of price appreciation.”
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The percentage of Californians who could afford a single-family home at the median price plummeted to 36% from 44% in the first quarter, according to the association’s housing affordability index. The state hit a record high for affordability in first quarter of 2012, with 56% of homebuyers able to buy a median-priced home.
People looking to buy a house needed to earn a minimum of $79,910 to qualify for a median home priced $415,770 statewide. Compare that to the prior quarter, when a minimum income $66,800 was needed to qualify for a home at the median home price of $350,490.
Madera County, in the Central Valley, was the most affordable county in the state, with 71% of homebuyers there able to afford a home, while San Francisco and San Mateo were tied for the least affordable, with only 17% of people able to buy a home in those jurisdictions.
In Los Angeles County, 37% of homebuyers were able to afford a median-priced home last quarter, while that percentage was considerably smaller in Orange County, with just 23% of homebuyers there able to buy a home — the most expensive jurisdiction in Southern California. San Bernardino County was the most affordable in Southern California, with 69% of home shoppers able to buy a home.
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