O.C. Home-Affordability Rate Dips to Lowest Since ’91

With home prices hitting record levels every month and interest rates rising, the percentage of Orange County households that can afford a typical home in the county dropped to 31% in January--the lowest figure recorded since 1991.

The California Assn. of Realtors, which released a statewide study Tuesday, found that the county’s housing affordability rate in January fell from 38% a year earlier and 33% in December.

A county household needed a minimum income of $81,412 in January to buy a median-price home of $292,241. That is based on a 20% down payment and a 30-year fixed-rate loan with an interest rate of 7.9%. The median price is the amount at which half the homes sell for more and half sell for less.

Statewide, the share of households that could buy a median-price, single-family home slid to 33% in January from 42% a year earlier, the steepest decline since 1989, according to the Realtors group.

In metropolitan areas across California, the percentage of households that can buy typical homes has fallen over the past year as housing prices have risen sharply and the Federal Reserve Board has raised interest rates. The Fed on Tuesday again raised the benchmark rate a quarter percentage point--the fifth increase since June.

In Los Angeles, the percentage slid to 38% from 43% in January, compared to the same month a year ago. The U.S. rate also edged downward to 54% from 56%.

The study is the first monthly report issued by the Realtors group, which previously has issued quarterly reports.