Only 1 in 3 California families can afford median-priced home

Home price gains in the Golden State slowed in the fourth quarter, leaving home affordability unchanged from the previous quarter’s five-year low.

The share of homebuyers who could afford to buy a median-priced, existing single-family home in California was 32 percent last quarter, same as in the third quarter when CAR’s affordability index fell under 35 percent for the first time since third-quarter 2008, according to the California Association of Realtors.

The index stood at 48 percent in fourth-quarter 2012 when homebuyers needed an annual income of $66,860 to purchase a home at the median price then, $352,450.

But that median shot up 22.4 percent year over year to $431,510 last quarter, requiring a minimum annual income of $89,240 to qualify to buy. CAR attributes the rise to high demand and lack of housing supply.

California housing affordability hit a record high of 56 percent in first quarter of 2012, but until last quarter had declined for six straight quarters.

Source: CAR