California Housing Affordability Worst Ever in 17 years: $236,000 income needed for $900,000 home

To purchase a median-priced home, which cost $906,600, buyers needed an annual income of $236,800.Photo byGustavo ZambellionUnsplash

California's housing affordability plunged to its lowest level in nearly 17 years during the second quarter of 2024, according to the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.). Only 14% of the state's homebuyers could afford a median-priced, existing single-family home, down from 17% in the previous quarter and 16% a year ago. This sharp decline is attributed to soaring home prices and record-high mortgage rates.

To purchase a median-priced home, which cost $906,600, buyers needed an annual income of $236,800. Monthly payments, including taxes and insurance, reached a record high of $5,920. The affordability index is now less than a third of its peak in 2012. Although recent drops in mortgage rates offer some hope, the minimum annual income required for homeownership has hit a new high for six of the last seven quarters.

Affordability for condos and townhomes also worsened, with only 22% of buyers able to afford a median-priced unit. Nationwide, about one-third of households can afford a median-priced home, contrasting sharply with California's figures.