After a surprising study revealed that the Los Angeles real estate market is the most expensive in the country when accounting for income, it’s only more clear that housing affordability is a major issue for the majority of buyers. As interest rates continue to inch up in expectation of the Fed’s predicted rate hike and home prices rose again in the first half of 2015, affordability could soon be a major market hurdle.
Affordability isn’t just a Los Angeles issue, it’s a statewide one. Let’s take a look at some of the numbers compiled by the California Association of Realtors for this month’s infographic.
After a further decline in the second quarter, only thirty percent of buyers in California can now afford to purchase a median-priced, existing single-family home.
The statewide median home price for a single-family home rose in the second quarter to $485,100.
The minimum annual income needed to qualify for the purchase of a median-priced existing single-family home is now almost six figures: $96,160.
At the current median home price, a monthly payment of $2,404 would be required to cover the principal, taxes and insurance on a 30-year fixed-rate loan.
These prices may seem down right affordable for any local readers looking to enter the Los Angels market, where there is little to no inventory less than $500,000. However, when we look at these numbers it’s important to realize that California’s median home price is now the highest in the country. We dissect these numbers to look for trends and one trend is increasingly clear, affordability is a growing problem in the California real estate market.
If you’re looking to buy or sell in Los Angeles, please don’t hesitate to call us at 323-829-8811. Or email Susan Andrews at susan@luxurylahomes.com.
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