These are some of the issues behind California’s housing crisis
Thousands more Sacramento residents can afford a home here this summer, new data show, reversing a six-year trend of decreasing affordability in early signs of a real estate turnaround.
Forty-four percent of local households can now afford a median-priced $385,000 Sacramento County home, up from 41 percent last year. That uptick stems from lower interest rates and reduced house price escalation. But the price of entry into the home-buying world remains steep.
To afford that home, a household would have to earn $78,000 per year, and would find itself with a $1,980 monthly payment on the mortgage, taxes and insurance. That assumes that the household members had $77,000 in cash available to make a 20-percent down payment.
The new numbers, published by the California Association of Realtors, continue to reflect the difficult nature of the state’s high-priced real estate market.
Only 30 percent of households in the state can afford a home. That lags the national average of 54 percent.
Real estate watchers say lower mortgage interest rates this year have kept the state’s housing market alive, but higher house prices continue to make it hard for Californians to buy a house.
To put Sacramento’s affordability in a historical perspective, some 74 percent of county residents were presumed to be able to afford a median priced house in 2012, when the real estate market house values had plunged to their lowest level in years.
Sales numbers in Sacramento have been down for more than one year on a monthly basis compared to the same month the previous year.
Statewide, the median home price this spring was $608,000. The highest was in San Francisco, at $1.7 million.
Notably, though, San Francisco scored only second worst on affordability, along with Santa Cruz County, at 17 percent. Worst was Mono County, where the median priced home of $700,000 was beyond the means of 85 percent of that county’s residents.
In a brief report issued last week, the state Legislative Analyst’s Office called the California real estate market weak, noting that homes sales statewide in June were down from the same month last year, and were notably lower than historic norms.
Housing prices statewide had been on a dramatic price run-up after the recession years from 2007 to 2011, at first prompting an increase in sales as consumers sought homes before prices could go higher. As affordability levels dropped, some potential buyers had backed out of the market, starting the latest cooling trend.