Bay Area households could afford to buy a median-priced
single-family home in the first quarter of this year compared
with the fourth quarter of 2017, as incomes rose more than
enough to offset an increase in home prices and interest
with the first quarter of last year, however, affordability
got worse, according to a California Association of Realtors quarterly
survey released Tuesday.
23 percent of Bay Area households earned enough to buy the
median-priced home in the first quarter, compared with 21
percent in the fourth quarter of last year and 25 percent in
the year-ago period.
the first quarter, a Bay Area household would have needed at
least $186,300 in annual income to make the $4,660 monthly
payment on a $900,000 home, with mortgage rates at 4.44
percent. The association figured that 23 percent of Bay Area
households earned at least that much, but affordability varied
widely by county.
San Francisco and San Mateo counties, only 15 percent of
households could afford a median-priced home, which averaged
$1,610,000 and $1,575,050, respectively, during the first
quarter. A household would need around $333,000 and $326,000
in annual income, respectively, to buy those homes.
Solano County, 42 percent of households earned enough
($89,000) to buy a $430,000 median-priced home.
affordability index stood at 31 percent statewide and 57
percent nationwide in the first quarter.
numbers understate affordability somewhat because they exclude
condos, which are generally cheaper than single-family homes.
The association calculated that 39 percent of households
statewide could have afforded a condo or townhome in the first
numbers also do not take into account a household’s wealth,
which can factor into affordability.
Bay Area home prices keep hitting
record highs, affordability isn’t even
close to a record low.
the beginning of 2006, when the association started tracking
affordability on a quarterly basis, it hit a trough of 10
percent in the second quarter of 2007, just before the housing
market went bust. Affordability peaked at 45 percent in the
first quarter of 2012, when prices were bottoming out.
reason affordability isn’t worse is because income growth has
been strong. The median household income in the Bay Area rose
to $97,249 in the first quarter from $89,017 the same quarter
its index, the association considers not just the level of
income but also the distribution. In the Bay Area, the share
of households making $150,000 to $500,000 or more rose 4
percent while the share making less than $75,000 declined 4