California homeownership remains out of reach for most families

According to data released Friday by the California Association of Realtors, only 19% of California households could manage the cost of a median-priced, existing single-family home during the third quarter. This figure mirrors affordability rates from both the previous quarter and the same period last year, indicating a lack of improvement for aspiring homeowners.

While home prices have seen slight declines, elevated mortgage rates are maintaining high overall costs. This situation results in substantial monthly payments for those hoping to purchase a home.

The required minimum qualifying household income to buy a median-priced California home remained steady at $228,000 in the third quarter, representing a $4,400 increase compared to a year prior. Monthly mortgage payments, encompassing principal, interest, taxes, and insurance, averaged $5,700 – consistent with the previous quarter but 2% higher than last year.

California’s average monthly housing payment is more than double the national average of $2,760, as reported by the C.A.R. The association cautioned that mortgage rates are likely to remain high due to persistent inflation, further limiting the purchasing power of potential buyers. This has been the case for 15 of the last 16 quarters.

The situation is particularly difficult in Southern California, where home prices and income requirements vary considerably by county.

In the Los Angeles metro area, the median price for an existing single-family home was $847,030, with a required monthly mortgage payment of $5,390 and a minimum household income of $215,600. Los Angeles County had a median home price of $958,450, necessitating an annual income of $244,000 and monthly payments of $6,100. Orange County presented the most significant hurdle, with a median home price of $1.47 million, requiring a minimum annual household income of $374,400 and monthly mortgage payments of $9,360.