California’s housing scene received a pair of encouraging news reports, with data showing improved levels of housing affordability and the state’s housing finance agency receiving a thumbs-up from a leading ratings agency.
New data from the California Association of Realtors’ (CAR) Traditional Housing Affordability Index found that the percentage of homebuyers who could afford to purchase a median-priced, existing single-family home within the state inched up to 31 percent in the fourth quarter of 2014 from 30 percent in the third quarter. However, this level was slightly below a revised 32 percent recorded in the fourth quarter of 2013, and the fourth quarter of 2014 was the seventh consecutive quarter that the index was below 40 percent; the housing affordability index peaked at 56 percent in the first quarter of 2012.
CAR also found that homebuyers needed to earn a minimum annual income of $91,550 to qualify for the purchase of a $452,140 statewide median-priced, existing single-family home in the fourth quarter of 2014. In comparison, the median home price was $467,280 in third-quarter 2014, and an annual income of $94,880 was needed to purchase a home at that price.
Compared to affordability in third-quarter 2014, 19 regions saw an improvement in housing affordability in the fourth quarter. Santa Barbara, Contra Costa, Napa, and Los Angeles counties saw the greatest quarter-to-quarter improvement in housing affordability, which was attributed to price declines, while San Francisco, Madera, and Merced counties saw a drop in affordability due to price increases from the previous quarter.
Separately, the California Housing Finance Agency (CalHFA) received good news from Moody’s Investor Service: The ratings agency upgraded its rating on the agency’s Home Mortgage Revenue Bonds from Baa2 to A3 while affirming its Aaa/VMIG 1 enhanced ratings on CalHFA’s Home Mortgage Revenue Bonds variable rate demand bonds and the A3 ratings on CalHFA’s issuer rating and the Housing Program Bonds. Moody’s revised its outlook on the issuer and Housing Program Bonds ratings to positive from stable.
“We are pleased by the upgrade and the other actions by Moody’s,” said Tia Boatman Patterson, executive director of CalHFA. “The improved rating and revised outlook will allow us to more efficiently raise funds and serve the housing needs of the people of California.”
