The combination of less competition in the early fall months and a modest increase in household income has led to a small uptick in home affordability for those looking for a property in California in the last quarter. According to new data from the California Association of Realtors, the percentage of home buyers who could afford to purchase a median-priced, existing single-family home in the state increased from 23 percent to 24 percent. While this is still down from 28 percent a year ago, it marks a step in right direction for a state notorious for its high home prices.
A minimum household income of $148,400 was the requisite amount needed to afford a median priced home in California which is currently $814,580. The monthly payment on a home of this price including taxes and insurance and with 20 percent down would be $3,710. Less than one in four Californian’s can comfortably afford a payment of that size.
Another factor contributing to the improved affordability index is historically low mortgage rates. Today, conforming no-point 30-year fixed mortgage rates are averaging 2.875 percent and 15-year rates are near 2.25 percent.
Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.biz, social media (#AramcoReport), or over the phone at (877) 700-0942 and your questions may be featured in an upcoming article.
