This impact has to kick in at some point, doesn’t it?

Housing affordability is on a prolonged downhill slide in California, falling for the sixth time in the third quarter of 2013.  As measured by The California Association of Realtors® (C.A.R.) Traditional Housing Affordability Index (HAI), the percentage of home buyers who could afford to purchase a median-priced, existing single-family home in the state fell by four percentage points to 32 percent compared to the first quarter of the year and was down from 49 percent in the third quarter of 2012.

The affordability index had reached an all-time high of 56 percent in the first quarter of 2012 but has trended lower every quarter since.  The third quarter of 2013 marked the first time the HAI has fallen below 35 since the third quarter of 2008.

Home buyers needed to earn a minimum annual income of $89,170 to qualify for the purchase of a $433,940 statewide median-priced, existing single-family home in the third quarter of 2013.  The monthly payment, including taxes and insurance on a 30-year fixed-rate loan, would be $2,230, assuming a 20 percent down payment and an effective composite interest rate of 4.36 percent.

A year earlier it required an annual income of $65,828 to purchase a median priced home of $339,930 in California with an interest rate of 3.64 percent.

Nearly every county experienced a double-digit decline in affordability when compared to last year, reflecting the substantial increase in California home prices on a year-to-year basis.  Sacramento, Monterey, and Sonoma counties experienced the largest year-to-year declines, while San Mateo, Marin, and San Francisco counties experienced the smallest.

San Bernardino was the most affordable county in the state with an index of 64 percent.  San Mateo was the least affordable at 15 percent.

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