Incomes in California Increasingly Lagging Behind Escalating Home Prices
Survey results released on Dec. 2 by the California Association of Realtors® show that rapidly escalating home prices in the state have made it significantly tougher over the past 12 months to qualify for a mortgage, despite low interest rates.
In this year’s third quarter, a household with a median income of $52,940 needed an additional $55,370 in annual earnings to reach the $108,310 qualifying income needed to purchase a median-priced home of $462,510, according to the association’s quarterly Homebuyer Income Gap Index.
The gap between California’s median household income and its median-priced, single-family home grew by 47.9% from the third quarter of 2003, the index found. In last year’s third quarter, the gap was $37,440 to reach the $89,070 income needed to purchase a median-priced home at $385,720.
According to the report, the state’s Central Valley offers the most affordable housing options overall. The area’s median household income of $40,640 was $27,030 short of the $67,670 needed to buy a median-priced home of $288,960.