Affordability in California Housing Shows Improvement in Q1

Affordability in California homeownership improved during the first quarter of this year, according to the latest Traditional Housing Affordability Index (HAI) data released by the California Association of Realtors (CAR).

The new HAI numbers found the percentage of California homebuyers that were able to afford a median-priced, existing single-family home rose in the first quarter to 34 percent, up from the 31 percent recorded in the fourth quarter of 2014 and up from 33 percent in the first quarter of 2014. This marked California’s second consecutive quarter of improvements in housing affordability and the highest HAI level since the second quarter of 2013—although it is some distance from the peak of 56 percent in the first quarter of 2012.

CAR also found that homebuyers needed to earn a minimum annual income of $87,700 just to qualify for a $442,430 statewide median-priced, existing single-family home during the first quarter. In comparison, the median home price was $418,570 in the first quarter of 2014 and an annual income of $86,800 was needed to purchase a home at that price.

Across the state, 17 regions experienced improvements in housing affordability while nine had declines and two were unchanged. Compared to one year ago, 11 regions had improvements, 12 had declines, and six held steady.