Housing Affordability Plummets in California

Housing affordability plunged in California to its lowest level in 11 years as fast-rising prices shut out from the market a growing number of potential homeowners, according to a report released Thursday.

The index, measuring the percentage of households that can afford a median-priced home, fell 7 percentage points to 27% from a year earlier, said a monthly report released by the California Assn. of Realtors.

The median home price, meaning half cost less and half cost more, rose in April by nearly 30% to $321,950 from a year earlier.

President Robert Bailey called the report unsurprising.

Even though mortgage rates have been edging down, Bailey said steep increases in home prices statewide have dropped the index to its lowest point since October 1991.

Although mortgage rates have attracted many buyers to the market, there is a record-low number of existing homes for sale statewide.

At the current pace of sales, the supply would be depleted in only two months, the group’s latest figures show.

In Los Angeles County, the affordability index dropped to 31% from 38% a year ago. In Orange County, it decreased to 23% from 28%, and in Ventura County, it fell to 32% from 37%.

Contra Costa County recorded the lowest rate statewide at 11%, down from a revised 13% a year ago.