With home prices on the rise in California, home affordability has taken a hit, according to the California Association of Realtors.
CAR's Housing Affordability Index showed the percentage of home buyers who can afford a median-priced, existing single-family home in the Golden State declined to 49 percent in the third quarter. This was a slight drop from 51 percent in the previous quarter.
Every county in Southern California had a lower affordability percentage in the third quarter. However, affordability improved or didn't change in the San Francisco Bay Area counties. San Bernardino and Solano County were the most affordable in the country, while San Mateo County was the least affordable.
In order to qualify for the purchase of a median-priced home in California, home buyers need to earn a minimum annual income of $65,810. This could be difficult for some, but those who do qualify are able to take advantage of record low rates.
According to Freddie Mac, a 15-year fixed-rate mortgage averaged 2.69 percent in the week ending November 8, while 30-year FRMs averaged 3.4 percent. Both of these rates make home buying highly affordable for qualified borrowers.