- Fifteen percent of California households could afford to purchase the $874,290 median-priced home in the fourth quarter of 2024, down from 16 percent in third-quarter 2024 and unchanged from 15 percent in fourth-quarter 2023
- A minimum annual income of $220,000 was needed to make monthly payments of $5,550, including principal, interest and taxes on a 30-year fixed-rate mortgage at a 6.76 percent interest rate.
- Twenty-four percent of home buyers were able to purchase the $670,000 median-priced condo or townhome. A minimum annual income of $170,000 was required to make a monthly payment of $4,250.
LOS ANGELES, Feb. 7, 2025 -- An upturn in mortgage rates and elevated home prices constrained California housing affordability in the fourth quarter, as borrowing costs remained near all-time highs, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today.
Infographic: https://www.car.org/Global/Infographics/HAI-2024-Q4
Fifteen percent of the state's homebuyers could afford to purchase a median-priced, existing single-family home in California in fourth-quarter 2024, down from 16 percent in the third quarter of 2024 and unchanged from the fourth quarter of 2023, according to C.A.R.'s Traditional Housing Affordability Index (HAI).
The fourth-quarter 2024 figure is about a fourth of the affordability index peak of 56 percent in the fourth 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.
Rates have begun trending upward since October and continued to stay elevated at the start of this year. Over the next quarter or two, rates could fluctuate as the impact of policies enacted by the new White House administration remains uncertain. The Federal Reserved announced at their January meeting that they will pause any changes on cutting rates and will take a wait-and-see strategy in the upcoming months. As such, mortgage rates will likely remain high.
A minimum annual income of $222,000 was needed to qualify for the purchase of a $874,290 statewide median-priced, existing single-family home in the fourth quarter of 2024. The monthly payment, including taxes and insurance (PITI) on a 30-year, fixed-rate loan, would be $5,550, assuming a 20 percent down payment and an effective composite interest rate of 6.76 percent. The effective composite interest rate was 6.63 percent in third-quarter 2024 and 7.39 percent in fourth-quarter 2023. The monthly PITI for a typical single-family home in California inched up from the previous quarter but stayed below the same quarter of last year.
The statewide median price of an existing single-family home edged down 0.7 percent quarter-to-quarter, due partly to seasonal factors, but the slight dip can also be attributed to a change in the mix of sales. On a year-over-year basis, California continued to record price increases for the sixth consecutive quarter. In fact, price growth reaccelerated its pace to 4.9 percent in fourth-quarter 2024 from 4.3 percent in the third quarter. As the market goes through the off season, home prices will soften further as inventory rises and competition cools off through the first quarter of the year. While moderate price growth will ease the affordability crunch that buyers face, elevated mortgage rates, however, will continue to be a challenge for many in the next couple of quarters.
The share of California households that could afford a typical condo/townhome in fourth-quarter 2024 dipped to 24 percent, down from 25 percent recorded in the previous quarter and up from the 22 percent recorded in the fourth quarter of 2023. An annual income of $170,000 was required to make the monthly payment of $4,250 on the $670,000 median-priced condo/townhome in the fourth quarter of 2024.
Compared with California, more than one-third (36 percent) of the nation's households could afford to purchase a $410,100 median-priced home, which required a minimum annual income of $104,000 to make monthly payments of $2,600. Nationwide, affordability inched up from 35 percent a year ago. In the fourth quarter of 2024, the nationwide minimum required annual income was less than half that of California's for the seventh consecutive quarter.
Key points from the fourth-quarter 2024 Housing Affordability report include:
- On a quarter-to-quarter basis, housing affordability declined in 23 counties and remained unchanged in 19. Only 11 counties showed quarter-to-quarter improvement in affordability as a result of modest price declines in those counties during the same time period. When compared to a year ago, 42 counties were more affordable, while six counties were less affordable and five remained unchanged.
- Lassen (50 percent) remained the most affordable county in the state, followed by Tehama (38 percent), and a three-way tie for the next rank between Plumas, Shasta and Tuolumne at 36 percent. Of all counties in California, Lassen continued to require the lowest minimum qualifying income ($67,200) to purchase a median-priced home in the fourth quarter of 2024.
- Mono (6 percent), a three-way tie between Monterey, San Luis Obispo, and Santa Barbara at 10 percent, and Los Angeles (11 percent) were the least affordable counties in California, with each of them requiring a minimum income of at least $235,600 to purchase a median-priced home in the respective counties. San Mateo continued to require the highest minimum qualifying income ($513,200) to buy a median-priced home in fourth-quarter 2024 and was the only county in the state with a minimum qualifying income of over $500,000. Santa Clara and Marin came in second and third with a minimum required income of $487,600 and $418,800, respectively.
- While housing affordability improved from a year ago in the majority of counties throughout the state due to higher household income and lower mortgage rates, home prices, however, remained elevated throughout much of California despite slower growth from the previous quarter. As a result, housing affordability in a fifth of the counties tracked by C.A.R. either remained unchanged or declined from the same quarter of last year. Sutter (28 percent) experienced the biggest affordability drop, falling three points from third-quarter 2024. Merced (27 percent) and Tehama (38 percent) followed closely, with each declining two points below the fourth quarter of 2023 as price growth in these counties grew more modestly than in other counties. Housing affordability in California remained near its all-time low across the state and continued to be a challenge for both buyers and sellers.
See C.A.R.'s historical housing affordability data.
See first-time buyer housing affordability data.
Leading the way…® in California real estate for nearly 120 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States with 200,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Sacramento.
CALIFORNIA ASSOCIATION OF REALTORS®
Traditional Housing Affordability Index
Fourth Quarter 2024
4th Qtr. 2024 | C.A.R. Traditional Housing Affordability Index | |||||||
STATE/REGION/COUNTY | 4th Qtr. 2024 | 3rd Qtr. 2024 | 4th Qtr. 2023 | Median Home Price | Monthly Payment Including Taxes & Insurance | Minimum Qualifying Income | ||
Calif. Single-family home | 15 | 16 | 15 | $874,290 | $5,550 | $222,000 | ||
Calif. Condo/Townhomes | 24 | 25 | 22 | $670,000 | $4,250 | $170,000 | ||
Los Angeles Metro Area | 14 | 15 | 14 | $825,000 | $5,240 | $209,600 | ||
Inland Empire | 20 | 22 | 20 | $597,500 | $3,790 | $151,600 | ||
San Francisco Bay Area | 20 | 21 | 19 | $1,288,000 | $8,170 | $326,800 | ||
United States | 36 | 35 | 35 | $410,100 | $2,600 | $104,000 | ||
San Francisco Bay Area | ||||||||
Alameda | 18 | 18 | 16 | $1,250,000 | $7,930 | $317,200 | ||
Contra Costa | 24 | 25 | 23 | $875,000 | $5,550 | $222,000 | ||
Marin | 18 | 20 | 16 | $1,650,000 | $10,470 | $418,800 | ||
Napa | 18 | 15 | 16 | $895,000 | $5,680 | $227,200 | ||
San Francisco | 21 | 21 | 20 | $1,600,000 | $10,150 | $406,000 | ||
San Mateo | 17 | 17 | 17 | $2,021,000 | $12,830 | $513,200 | ||
Santa Clara | 18 | 19 | 18 | $1,920,000 | $12,190 | $487,600 | ||
Solano | 26 | 26 | 25 | $595,000 | $3,780 | $151,200 | ||
Sonoma | 18 | 18 | 15 | $830,000 | $5,270 | $210,800 | ||
Southern California | ||||||||
Imperial | 28 | 28 | 27 | $387,000 | $2,460 | $98,400 | ||
Los Angeles | 11 | 11 | 11 | $939,690 | $5,960 | $238,400 | ||
Orange | 12 | 12 | 11 | $1,360,000 | $8,630 | $345,200 | ||
Riverside | 20 | 21 | 19 | $629,000 | $3,990 | $159,600 | ||
San Bernardino | 27 | 27 | 24 | $499,000 | $3,170 | $126,800 | ||
San Diego | 12 | 12 | 11 | $985,000 | $6,250 | $250,000 | ||
Ventura | 14 | 13 | 13 | $915,000 | $5,810 | $232,400 | ||
Central Coast | ||||||||
Monterey | 10 | 10 | 8 | $930,000 | $5,900 | $236,000 | ||
San Luis Obispo | 10 | 11 | 8 | $930,000 | $5,900 | $236,000 | ||
Santa Barbara | 10 | 13 | 10 | $1,187,500 | $7,540 | $301,600 | ||
Santa Cruz | 14 | 14 | 13 | $1,309,000 | $8,310 | $332,400 | ||
Central Valley | ||||||||
Fresno | 30 | 30 | 28 | $421,070 | $2,670 | $106,800 | ||
Glenn | 32 | 40 | 30 | $371,000 | $2,350 | $94,000 | ||
Kern | 29 | 30 | 28 | $404,950 | $2,570 | $102,800 | ||
Kings | 33 | 33 | 29 | $365,000 | $2,320 | $92,800 | ||
Madera | 30 | 31 | 29 | $429,000 | $2,720 | $108,800 | ||
Merced | 27 | 27 | 29 | $415,000 | $2,630 | $105,200 | ||
Placer | 31 | 30 | 28 | $647,250 | $4,110 | $164,400 | ||
Sacramento | 25 | 26 | 23 | $550,000 | $3,490 | $139,600 | ||
San Benito | 18 | 21 | 15 | $830,000 | $5,270 | $210,800 | ||
San Joaquin | 26 | 25 | 22 | $540,170 | $3,430 | $137,200 | ||
Stanislaus | 28 | 29 | 23 | $470,000 | $2,980 | $119,200 | ||
Tulare | 30 | 31 | 31 | $385,000 | $2,440 | $97,600 | ||
Far North | ||||||||
Butte | 28 | 29 | 29 | $450,000 | $2,860 | $114,400 | ||
Lassen | 50 | 52 | 49 | $265,000 | $1,680 | $67,200 | ||
Plumas | 36 | 23 | 33 | $379,000 | $2,410 | $96,400 | ||
Shasta | 36 | 34 | 36 | $368,000 | $2,340 | $93,600 | ||
Siskiyou | 34 | 36 | 32 | $319,000 | $2,020 | $80,800 | ||
Tehama | 38 | 38 | 40 | $325,000 | $2,060 | $82,400 | ||
Trinity | 29 | 34 | 28 | $299,300 | $1,900 | $76,000 | ||
Other Calif. Counties | ||||||||
Amador | 34 | 38 | 31 | $436,000 | $2,770 | $110,800 | ||
Calaveras | 34 | 31 | 31 | $450,000 | $2,860 | $114,400 | ||
Del Norte | 33 | 28 | 26 | $369,950 | $2,350 | $94,000 | ||
El Dorado | 25 | 27 | 23 | $675,000 | $4,280 | $171,200 | ||
Humboldt | 23 | 23 | 24 | $440,000 | $2,790 | $111,600 | ||
Lake | 32 | 35 | 28 | $350,000 | $2,220 | $88,800 | ||
Mariposa | 21 | 27 | 18 | $465,000 | $2,950 | $118,000 | ||
Mendocino | 20 | 18 | 18 | $500,000 | $3,170 | $126,800 | ||
Mono | 6 | 7 | 5 | $927,500 | $5,890 | $235,600 | ||
Nevada | 28 | 26 | 24 | $537,500 | $3,410 | $136,400 | ||
Sutter | 28 | 28 | 31 | $445,500 | $2,830 | $113,200 | ||
Tuolumne | 36 | 40 | 32 | $410,000 | $2,600 | $104,000 | ||
Yolo | 25 | 24 | 22 | $599,000 | $3,800 | $152,000 | ||
Yuba | 27 | 27 | 24 | $438,900 | $2,790 | $111,600 | ||
Traditional Housing Affordability Indices (HAI) were calculated based on the following effective composite interest rates: 6.76% (4Qtr. 2024), 6.63% (3Qtr. 2024) and 7.39% (4Qtr. 2024).
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