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Realtors’ Group Says Low Interest Rates Don’t Keep Affordability In Check
Higher home prices negated the lowest interest rates in more than a year, and reduced Californians’ ability to afford a home purchase in the second quarter of 2019, the California Association of Realtors (C.A.R.) reported. The percentage of home buyers who could afford to purchase a median-priced, existing single-family home in California in Q2 2019 dipped to 30% from 32% Q1 2019.
That was up from 26% in the second quarter a year ago, according to C.A.R.’s Traditional Housing Affordability Index (HAI). California’s housing affordability index hit a peak of 56% in the second quarter of 2012.
Housing affordability for condominiums and townhomes also slipped in first-quarter 2019 compared to the previous quarter, with 40% of California households earning the minimum income to qualify for the purchase of a $475,000 median-priced condominium/townhome, down from 41% in the previous quarter.
Other report takeaways included:
– Compared with California, more than half of the nation’s households (55 percent) could afford to purchase a $279,600 median-priced home.
– When compared to a year ago, housing affordability improved in 42 tracked counties and declined in five counties. Affordability remained flat in one county.
– In the San Francisco Bay Area, affordability improved from second-quarter 2018 in every county. San Francisco County was the least affordable, with just 17% of households able to purchase the $1,700,000 median-priced home.
– Affordability also improved in all SoCal regions, with Orange County being the least affordable (24%) and San Bernardino County being the most affordable (50%). Los Angeles came in at 29%.
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