Home for sale
A home for sale in San Diego. Photo by Alexander Nguyen

California’s housing affordability hit a 10-year low in the third quarter, with tight housing inventory driving home prices higher in previously more affordable regions, such as the Inland Empire and Central Valley.

But housing affordability was unchanged in San Diego County, according to the report released Thursday by the California Association of Realtors.

The percentage of home buyers who could afford to purchase a median-priced existing single-family home in California in the third quarter fell to 28 percent, down from 29 percent in the second quarter of 2017 and down from 31 percent in the third quarter a year ago, according to CAR’s Traditional Housing Affordability Index.

This is the 18th consecutive quarter that the index has been below 40 percent and the lowest since third-quarter 2015, CAR said. California’s housing affordability index hit a peak of 56 percent in the first quarter of 2012.

CAR’s housing affordability index measures the percentage of all households that can afford to purchase a median-priced, single-family home in California. The index is considered the most fundamental measure of housing well-being for homebuyers in the state.

A minimum annual income of $112,100 was needed to qualify for the purchase of a $555,680 statewide median-priced existing single-family home in the third quarter of 2017, CAR said. The monthly payment, including taxes and insurance on a 30-year fixed-rate loan, would be $2,800, assuming a 20 percent down payment and an effective composite interest rate of 4.16 percent. The effective composite interest rate in second-quarter 2017 was 4.09 percent and 3.76 percent in the third quarter of 2016.

The index of housing affordability in San Diego County was unchanged at 26 percent, with a median home costing $607,000. Both Los Angeles and Orange Counties were less affordable, according to the latest report.

— From Staff and Wire Reports

Chris Jennewein is Editor & Publisher of Times of San Diego.