Home Affordability Improves Despite Mortgage Rate Rise
Housing affordability in California has improved slightly compared to three years ago, despite the recent increases in mortgage interest rates, TRW REDI Property Data reports.
The average mortgage payment in California consumed 43.9% of the average annual income in the state in the first half of 1994, according to TRW REDI Property Data. This compares to 46.5% in 1991.
Affordability has improved because income levels have risen in California over the last three years, albeit only marginally, and mortgage rates are still low compared to historical standards, TRW said.
Moreover, the average size of a loan for a home purchase has remained almost unchanged in California since 1991.
The TRW study’s ranking of affordability by counties shows that the San Francisco Bay Area is the least affordable region of the state, with more than 54% of the average income going toward mortgage payments. But this is a significant improvement over the 63% recorded 3 years ago.
The most affordable housing markets in the state are among the northern counties where mortgage payments represent less than one third of average local income levels.
California Affordability Index
Year Average Average Payment Mortgage Income Mortgage as a ratio Rate of income 1991 $33,062 $155,784 46.5% 9.25 1992 $34,351 $156,334 44.9% 8.40 1993 $34,832 $156,111 44.2% 7.33 Jan-June 1994 $35,459 $157,681 43.9% 7.98
Note: Income figures are based on data from California Tax Franchise Board and Department of Finance. Mortgage rates represent average annual rate on a 30 year fixed rate mortgage. Average mortgage size based on data compiled from County Recorder Offices by TRW REDI Property Data.
County Rank by Housing Affordability
Mortgage Payments as Percent of Average Income
Mortgage Size ($) Payment as Ratio of Income Rank, County 1991 1994 1991 1994 Jan.-June Jan.-June 1--Siskiyou 66,923 66,472 29.8 24.6 2--Lassen 76,433 82,781 28.3 25.4 3--Trinity 65,481 76,481 28.1 27.2 4--Shasta 87,809 90,185 32.3 27.5 5--Kern 90,634 93,631 32.7 28.1 6--Tehama 68,128 77,711 30.7 29.1 7--Plumas 78,312 98,778 29.3 30.7 8--Butte 88,627 91,586 35.9 30.8 9--Humboldt 85,100 95,581 33.6 31.3 10--Stanislaus 110,840 105,742 40.2 31.9 11--San Bernardino 119,900 114,704 40.3 32.0 12--Kings 87,277 91,735 36.7 32.0 13--Tuolumne 96,092 105,943 35.3 32.3 14--Sacramento 124,254 123,329 39.2 32.3 15--Del Norte 97,026 93,203 40.5 32.3 19--Solano 137,691 137,131 40.9 33.8 20--Riverside 124,482 118,953 42.6 33.8 21--Placer 140,885 146,098 39.4 34.0 22--Yuba 84,056 87,937 39.5 34.3 23--Glenn 81,588 92,474 36.8 34.6 24--Contra Costa 170,034 181,858 39.4 34.9 25--Merced 100,211 96,136 44.0 35.0 26--El Dorado 127,282 132,595 40.8 35.3 27--San Joaquin 119,787 119,020 43.1 35.5 28--Tulare 84,787 92,770 39.3 35.6 29--Nevada 119,058 131,345 39.5 36.1 30--Yolo 126,520 136,472 41.0 36.7 31--Mendocino 98,072 114,795 38.8 37.7 32--Imperial 86,275 95,747 42.6 39.2 33--San Luis Obispo 140,142 139,040 47.7 39.3 34--Napa 158,685 169,900 44.3 39.3 35--Sonoma 148,672 156,293 45.2 39.4 36--Orange 184,311 187,060 48.7 41.0 37--Alameda 168,910 175,647 47.8 41.3 38--Santa Clara 195,638 208,148 47.1 41.6 39--San Mateo 218,934 230,726 48.0 42.0 40--Marin 234,285 267,723 44.6 42.3 41--Ventura 178,106 175,375 51.8 42.4 42--San Diego 151,840 160,574 48.3 42.4 43--Los Angeles 175,886 172,249 53.1 43.2 44--Santa Barbara 165,993 178,294 49.6 44.3 45--Santa Cruz 176,652 179,451 56.0 47.2 46--Monterey 159,179 167,107 54.4 47.4 47--San Francisco 218,846 226,463 63.0 54.1 California 155,784 157,681 46.5 43.9
