The first quarter of 2016 improved by 4% from last quarter with 34% of household in California able to purchase a median priced home, according to the California Association of Realtors.
Now, bear in mind, these standards are relative to the Golden State.
For example, currently, homebuyers need to earn a lease $92,571 per year to qualify to purchase a home for $465,280, the statewide median-priced home.
This is considered home affordability in California.
The monthly payment after taxes and insurance on a 30-year fixed-rate loan would be $2,314, if there was a 20% down payment and interest rate of 4.01%.
This increase in affordability was due to both higher wages and lower seasonal home prices, according to CAR. Affordability rose from 30% in the fourth quarter of 2015 to 34% in 2016. It remained flat from 2015’s first quarter as rising home price offset income gains.
This makes the 12th consecutive quarter the affordability index has been below 40%, and is near the mid-2008 low of 29%, according to CAR’s Traditional Housing Affordability Index. The state’s index hit a peak during first quarter 2012 of 56%.
CAR’s HAI measures the percentage of households that can afford to purchase a median-priced, single-family home in California. It also reports affordability for regions and some counties in the state.
Currently, homebuyers need to earn a lease $92,571 per year to qualify to purchase a home for $465,280, the statewide median-priced home. The monthly payment after taxes and insurance on a 30-year fixed-rate loan would be $2,314, if there was a 20% down payment and interest rate of 4.01%.
The effective composite interest rate for the fourth quarter of 2015 was 4.07% and 3.97% for the first quarter of 2015.
During the fourth quarter of 2015 the median home price was $483,810, and the median income needed was $96,790 per year.
Recently, on its road to recovery, California gained back all the jobs it had lost during the recession.