The percentage of households in California able to afford a median-priced home stood at 23 percent in December, a 5 percentage-point decrease compared to the same period a year ago when the Index was at 28 percent, according to a recent C.A.R. report. The December Housing Affordability Index (HAI) declined two points from October, when it stood at 25 points. C.A.R.'s monthly housing affordability index measures the percentage of households that can afford to purchase a median-priced home in California. C.A.R. also reports housing affordability indexes for regions and select counties within the state. The index is the most fundamental measure of housing well-being in the state.
The minimum household income needed to purchase a median-priced home at $404,520 in California in December was $94,730, based on a typical 30-year, fixed-rate mortgage at 5.82 percent and assuming a 20 percent downpayment. The minimum household income needed to purchase a median-priced home was up from $81,290 in December 2002, when the median price of a home was $338,840 and the prevailing interest rate was 6.10 percent. The minimum household income needed to purchase a median-priced home at $173,200 in the U.S. in December 2003 was $40,560.
At 57 percent, the High Desert region was the most affordable C.A.R. region in the state, followed by the Sacramento region at 36 percent. The Northern Wine Country and San Diego regions were the least affordable in the state at 15 percent.