1. California Housing Affordability Update –
Q2-2019
Traditional Affordability Index

2. Housing affordability peaked at Q2-2012
California,
Annual
Quarterly
C.A.R.’s traditional Housing Affordability Index (HAI) was replaced with the First-Time Buyer Housing Affordability Index (FTB-HAI) in 2006.
Note this slide takes the average of the 3 months in each of the quarters.
C.A.R. began producing its Housing Affordability Index (HAI) in At that time, fixed-rate mortgages were the prevailing form of financing a home purchase, while the calculations used to produce the HAI reflected a 20 percent down payment. The methodology also assumed a monthly payment for principal, interest, taxes and insurance that was no more than 30 percent of a household’s income. In the more than two decades since the CALIFORNIA ASSOCIATION OF REALTORS® first conceived the HAI, the mortgage finance landscape has changed dramatically. The range of mortgage products available to buyers as well as underwriting criteria has changed. C.A.R. developed the new index measuring affordability for first-time home buyers to better reflect the realities of today’s real estate market.
SERIES: Housing Affordability Index of Traditional Buyers
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

3. Housing Affordability – Traditional Index
California:
C.A.R. began producing its Housing Affordability Index (HAI) in At that time, fixed-rate mortgages were the prevailing form of financing a home purchase, while the calculations used to produce the HAI reflected a 20 percent down payment. The methodology also assumed a monthly payment for principal, interest, taxes and insurance that was no more than 30 percent of a household’s income. In the more than two decades since the CALIFORNIA ASSOCIATION OF REALTORS® first conceived the HAI, the mortgage finance landscape has changed dramatically. The range of mortgage products available to buyers as well as underwriting criteria has changed. C.A.R. developed the new index measuring affordability for first-time home buyers to better reflect the realities of today’s real estate market.
SERIES: Housing Affordability Index of Traditional Buyers
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

4. Affordability Peak vs. Current
HAI Peak vs. Current
SERIES: Housing Affordability Index of Traditional Buyers
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

5. Minimum Annual Income Required During Affordability Peak vs. Current
Region
2012 Q1
2019 Q2
% CHG
CA SFH
$56,320
$122,960
118.3%
CA Condo/Townhomes
$44,440
$95,960
115.9%
Los Angeles Metropolitan Area
$53,780
$109,090
102.8%
Inland Empire
$35,170
$76,760
S.F. Bay Area
$90,370
$197,970
119.1% US
$32,000
$56,480
76.5%
SERIES: Housing Affordability Index of Existing Detached Homes
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

6. Minimum Annual Income Required – Current vs. Last Year
Region
2018 Q2
2019 Q2
CHG. in $
CA SFH
$126,490
$122,960
-$3,530
CA Condo/Townhomes
$101,270
$95,960
-$5,310
Los Angeles Metropolitan Area
$112,340
$109,090
-$3,250
Inland Empire
$76,310
$76,760
$450
S.F. Bay Area
$219,380
$197,970
-$21,410 US
$57,020
$56,480
-$540
SERIES: Housing Affordability Index of Existing Detached Homes
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

7. Monthly PITI During Affordability Peak vs. Current
Region
2012 Q2
2019 Q2
% CHG
CA SFH
$1,410
$3,070
118.0%
CA Condo/Townhomes
$1,110
$2,400
116.1%
Los Angeles Metropolitan Area
$1,340
$2,730
103.5%
Inland Empire
$880
$1,920
118.1%
S.F. Bay Area
$2,260
$4,950
119.0% US
$800
76.3%
SERIES: Housing Affordability Index of Existing Detached Homes
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

8. Monthly PITI – Current vs. Last Year
Region
2018 Q2
2019 Q2
% CHG
CA SFH
$3,160
$3,070
-2.8%
CA Condo/Townhomes
$2,530
$2,400
-5.1%
Los Angeles Metropolitan Area
$2,810
$2,730
Inland Empire
$1,910
$1,920
0.5%
S.F. Bay Area
$5,480
$4,950
-9.7% US
$1,430
$1,410
-1.4%
SERIES: Housing Affordability Index of Existing Detached Homes
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

9. Housing Affordability in CA by county
2019-Q2: % able to purchase median-priced home
SERIES: Housing Affordability Index of Traditional Buyers
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®