For release: Housing affordability for all Californians deteriorates Affordability gap for Black and Hispanic/Latino households remains wide Multimedia:2023 Housing Affordability by Ethnicity slides LOS ANGELES (April 11) – Housing affordability continued to deteriorate for all ethnic home-buying groups last year as interest rates rose higher and the typical mortgage payment for a median-priced home climbed from a year ago, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today. Eghteen percent of all Californians earned the minimum income needed to purchase a home in 2023, down from 21 percent in 2022. At the same time, housing affordability for White/non-Hispanic households fell from 25 percent in 2022 to 21 percent in 2023. Nine percent of Black and Hispanic/Latino households could afford the same median-priced home in 2023, down from 11 percent for both ethnic groups. The significant difference in housing affordability for Black and Hispanic/Latino households illustrates the homeownership gap and wealth disparity for communities of color, which could worsen as the economy slows and rates remain elevated in 2024. Housing affordability was better for Asians but also declined from the prior year, with the index registering 28 percent of Asian homebuyers who could afford the median-priced home in 2023, down from 32 percent in 2022, according to C.A.R.’s Housing Affordability Index. Housing affordability gaps narrowed last year but remained wide as interest rates continued to climb while home prices stayed relatively flat. The affordability gap between Blacks and the overall population in California improved from 9.7 percentage points in 2022 to 8.5 percentage points in 2023, and the gap for Hispanics/Latinos improved from 9.6 percentage points in 2022 to 8.9 percentage points in 2023. According to the Census Bureau’s American Community Survey, the 2022 homeownership rate for all Californians was 54 percent, 64 percent for non-Hispanic Whites, 59 percent for Asians, 45 percent for Hispanics/Latinos and 35 percent for Blacks. With Black and Latino households having much less wealth than the national average, C.A.R. last year urged the state to fully fund the California Dream For All Shared Appreciation Loan assistance program, which provides a loan for 20 percent of the home purchase price, in the California 2023-2024 state budget. This program will help bridge down payment and closing cost hurdles that people of color often experience more acutely and allow many working Californians to get on the housing ladder and gain the benefits of homeownership. Additionally, in an effort to address California’s growing housing affordability crisis and racial homeownership divide, C.A.R. has partnered with nonprofit housing organizations to provide closing cost grants up to $10,000 for eligible first-time home buyers from an underserved community. Since 2022, C.A.R.’s Housing Affordability Fund’s Pathway to Homeownership Closing Cost Assistance grantprogram hasprovided closing cost grants totaling $2 million for 208first-time home buyer households from an underserved communitythroughout California. By the end of 2024, C.A.R. expects to have provided a total of $3 million to more than 300 first-time home buyer households since inception of the Pathway to Homeownership Closing Cost Assistance program. A minimum annual income of $204,800 was needed to qualify for the purchase of a $813,980 statewide median-priced, existing single-family home in 2023. The monthly payment, including taxes and insurance on a 30-year, fixed-rate loan, would be $4,190, assuming a 20 percent down payment and an effective composite interest rate of 6.66 percent. The 2023 California median income for Whites was $103,870, $120,630 for Asians, $75,950 for Hispanics/Latinos and $63,800 for Blacks — an income gap of nearly one-third that of the overall population, which was $92,420. C.A.R.’s Housing Affordability Index (HAI) measures the percentage of 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. Key points from C.A.R.’s 2023 Housing Affordability by Ethnicity report include: Leading the way…® in California real estate for more than 118 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States with more than 200,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles. # # # CALIFORNIA ASSOCIATION OF REALTORS® 2023 C.A.R. Traditional Housing Affordability Index STATE/REGION/COUNTY All White, Non- Hispanic Asian Hispanic/ Latino Black Median Home Price Monthly Payment Including Taxes & Insurance* Minimum Qualifying Income Calif. Single-family home 18 21 28 9 9 $813,980 $5,120 $204,800 Calif. Condo/Townhome 26 31 38 16 15 $640,000 $4,030 $161,200 United States 38 41 54 31 24 $394,100 $2,480 $99,200 San Francisco Bay Area Alameda 19 21 25 10 7 $1,225,000 $7,710 $308,400 Contra Costa 25 29 35 15 11 $850,000 $5,350 $214,000 San Francisco 21 26 18 17 6 $1,562,500 $9,830 $393,200 San Mateo 17 19 20 10 8 $1,960,000 $12,330 $493,200 Santa Clara 20 21 25 8 9 $1,765,000 $11,110 $444,400 Solano 27 30 39 18 22 $586,000 $3,690 $147,600 Southern California Los Angeles 14 22 18 7 8 $833,380 $5,240 $209,600 Orange 13 16 15 7 7 $1,260,000 $7,930 $317,200 Riverside 23 26 30 18 20 $612,000 $3,850 $154,000 San Bernardino 31 34 41 27 23 $475,000 $2,990 $119,600 San Diego 14 16 21 8 6 $931,200 $5,860 $234,400 Central Valley Fresno 33 43 39 26 20 $410,000 $2,580 $103,200 Kern 34 39 55 29 29 $379,000 $2,380 $95,200 Sacramento 28 30 34 23 21 $527,086 $3,320 $132,800 San Joaquin 29 32 38 21 24 $535,000 $3,370 $134,800 Stanislaus 19 24 19 14 15 $460,000 $2,890 $115,600 * Assumes 20 percent downpayment
April 11, 2024
as interest rates set record highs, C.A.R. reports
2023 Housing Affordability by Ethnicity motiongraphic
2023 Traditional Housing Affordability Index by Ethnicity
FAQs
What percentage of Californians can afford a house? ›
The California Association of Realtors is reporting that only seventeen percent of the state's homebuyers could afford to purchase a median-priced, existing single-family home in California in the first-quarter 2024.
What is the current affordability index in California? ›The current state of housing affordability in California as of Q4 2023 shows a stark landscape, with only 15% of households able to afford median-priced homes, necessitating a minimum annual income of $222,800. Condos and townhomes offer slightly better affordability at 22%, requiring $174,000 in income.
What is the homeownership rate in California by race? ›According to the Census Bureau's American Community Survey, the 2021 homeownership rate for all Californians was 55 percent, 63 percent for Whites, 60 percent for Asians, 44 percent for Hispanics/Latinos and 37 percent for Blacks.
What are the statistics for the housing crisis in California? ›55% of renters in California are cost burdened, compared to 50% in the US; 38% of homeowners in California are cost burdened, compared to 28% in the US. California has higher rates of cost-burdened households than the US as a whole. in ten mortgaged homeowners—spend 30% or more of their household income on housing.
What percentage of Californians make over $100000 a year? ›| State | Households Over 100k | 100k-150k |
|---|---|---|
| Connecticut | 40.4% | 17.6% |
| California | 39.8% | 17.1% |
| New Hampshire | 37.8% | 18.9% |
| Virginia | 37.8% | 17.2% |
To afford an $800,000 house, you typically need an annual income between $200,000 to $260,000, depending on your financial situation, down payment, credit score, and current market conditions. However, this is a general range, and your specific circ*mstances will determine the exact income required.
How does the average person afford a house in California? ›Affordability depends on both the costs of the housing, as well as the income and/or wages of households. Annual household income needed to qualify for a mortgage on a mid-tier California home in June 2024 was about $239,000—over 2 times the median California household income in 2022 ($95,500).
Is California becoming unaffordable? ›Housing affordability has declined over the last three decades; as of 2018, less than a third of Californians could afford a median-priced home; in job centers such as the San Francisco Bay Area, that number is less than a quarter.
What is considered top 5% in California? ›- How much you need to be in the top 5%: $250,000.
- Average household income for the top 5%: $555,007.
- Median household income for the entire state: $84,097.
- How much more the average 5% makes than the median: 6.6x.
Hispanics (of any race) are the largest single ethnic group in the state. Spanish is the state's second most widely spoken language.
Which racial group has the lowest rates of homeownership? ›
According to data from the Census Bureau, homeownership in the U.S. varies significantly by race and ethnicity. In the 4th quarter of 2023, the homeownership rate among non-Hispanic White Americans was 73.8%, followed by Asian Americans (63%), Hispanic Americans (49.8%), and Black Americans (45.9%).
What race has the lowest household income? ›They are also similar, but much lower ($10,000), across racial and ethnic groups for single-parent families. However, because of the differences in family structure across groups, black families have the lowest median income ($12,500) while Hispanic families have the highest ($18,700).
Why is there no affordable housing in California? ›This scarcity of affordable housing is due to a combination of restrictive and exclusionary land use and planning policies, a lack of federal and state investment in affordable housing, and local opposition to the development of affordable housing.
Will California homes ever be affordable again? ›' Housing affordability challenges are currently persisting amid supply shortages and high demand. Experts suggest there may be some moderation in price growth, but it is unlikely that we will see broad declines in the California real estate market.
Is there a housing shortage in California in 2024? ›As of 2024, California faces a dire housing shortage. By 2025, the state will need 3.5 million additional homes to meet demand, but building rates are significantly below this target. The median home price in California is over $800,000, more than double the national average.
What percent of people in California own a home? ›Homeownership in California is increasingly out of reach relative to the country: in 2021 the share of adults who own their home in California was just 43.5 percent, more than 15 percentage points lower than the rest of the United States, which is the largest the gap has ever been.
What percent of people can afford a house? ›Only 15% of California households could afford to buy a home during the third quarter of 2023, according to new figures released by the California Association of Realtors. The new figures represent the lowest home affordability rate since 2007, a news release said.
What percentage of American adults have a household income over $100000? ›12% of *households* have income between $75k and $99,999 and 15.5% are 100K to 150K. 8.3% and 10.3% are above, so about a third of **households** have over $100,000 in income. But that may well mean two wage-earners, or people with more than one source of income.