Surging home prices in California have pushed the state’s housing affordability to its lowest level in nearly two years.
According to the California Association of Realtors’ (CAR) latest housing affordability index, the statewide median home price in the third quarter of 2020 increased by a whopping 13.6% from the previous quarter and 13.8% from the third quarter of 2019.
And the double-digit increase in home prices led to only 28% of home buyers in the state being able to afford the $693,680 median price of an existing single-family home in Q3 of 2020 – down from 33% in Q2 and the lowest percentage since the fourth quarter of 2018.
Figures from CAR also revealed that a minimum annual income of $127,200 was needed to qualify for the purchase of a median-priced single-family home in the third quarter of 2020.
Additionally, housing affordability for condominiums and townhomes also dropped from the second quarter 2020, with two in five (42%) California households earning the minimum income to qualify for the purchase of a $512,000 median-priced condominium/townhome.
For comparison, CAR said that more than half of US households (55%) could afford to an existing, single family home at the national median price of $313,500.