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Only 17% of state consumers can afford to buy an existing California-median detached home in the first quarter of 2025, with no changes from 15% in the fourth quarter of 2024 from a year ago, the California Association of Realtors announced Friday.
The affordability of California homes remained low in history as mortgage rates rose to their highest levels in three-thirds amid growing economic uncertainty, continuing to approach their all-time highs.
Monthly minimum mortgage payments for median homes, including taxes and insurance, fell 1.8% from Q4 2024, but increased 4.6% from Q1 2024, as effective mortgage rates rose from both the previous quarter and last year’s fourth quarter.
In the first quarter of 2025, I was eligible to purchase an existing detached home for $830,000 in Metro Los Angeles at a minimum annual income of $213,600.
Meanwhile, Los Angeles County needed a minimum annual income of $222,000 to purchase a detached home in the first quarter of 2025.
In Orange County, buying an existing $1.45 million detached home required an annual income of $373,200, the car said.
The growing concerns of economic uncertainty have been creating volatility over the past few weeks. Interest rates could continue to fluctuate over the next quarter or two quarters, as the impact of trade policies enacted by the White House administration remains unknown, according to the CAR.
The Federal Reserve announced at this week’s meeting that they remain stable and will continue to assess the economic impact of tariffs over the coming months.
The share of California households that could afford a typical condominium/townhome in the first quarter of 2025 remained stable at 24%, as in the previous quarter and the previous year. In the first quarter of 2025, a monthly payment of $4,310 was required to earn $172,400 in annual income to pay $4,310.
Compared to California, more than a third of the country’s households (over 37%) could afford to buy a home with a median price of $402,300.
Nationally, affordable prices have remained the same for a year. In the first quarter of 2025, the national minimum annual income required was less than half that of California for the eighth consecutive quarter.
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