Talking Points
- Lower interest rates failed to offset strong seasonal price increases, making it harder for Californians to purchase a home in the second quarter of 2016, the CALIFORNIA ASSOCIATION OF REALTORS® reported.
- The percentage of home buyers who could afford to purchase a median-priced, existing single-family home in California in second-quarter 2016 fell to 31 percent from the 34 percent recorded in the first quarter of 2016 and was up from 30 percent in second-quarter 2015, according to C.A.R.’s Traditional Housing Affordability Index (HAI). This is the 13th consecutive quarter that the index has been below 40 percent and is near the mid-2008 low level of 29 percent. California’s housing affordability index hit a peak of 56 percent in the first quarter of 2012.
- C.A.R.’s HAI measures the percentage of all households that can afford to purchase a median-priced, single-family home in California. C.A.R. also reports affordability indices for regions and select counties within the state. The Index is considered the most fundamental measure of housing well-being for home buyers in the state.
- Home buyers needed to earn a minimum annual income of $101,217 to qualify for the purchase of a $516,220 statewide median-priced, existing single-family home in the second quarter of 2016. The monthly payment, including taxes and insurance on a 30-year, fixed-rate loan, would be $2,530, assuming a 20 percent down payment and an effective composite interest rate of 3.85 percent. The effective composite interest rate in first-quarter 2016 was 4.01 percent and 3.95 percent in the second quarter of 2015.