The percentage of home buyers who could afford to purchase a median-priced, existing single-family home in California in third-quarter 2022 rose slightly to 18 percent from 16 percent in the second quarter of 2022 but was down from 24 percent in the third quarter of 2021, according to C.A.R.'s Traditional Housing Affordability Index also known as HAI.
California Association of Realtor also known as CAR'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.
The median price of existing single-family homes in California experienced the largest quarter-to-quarter decline in price since the first quarter of 2011. Despite the sizable quarter-to-quarter drop in median price, the share of households in California that could afford to buy a median-priced condominium or townhome continued to slide from last year as the cost of borrowing remained high.
Nationwide housing affordability also plunged in third-quarter 2022. Compared with California, 39 percent of the nation's households could afford to purchase a $398,500 median-priced home, which required a minimum annual income of $92,400 to make monthly payments of $2,310.
Nationwide affordability was 50 percent a year ago.