What is with two-thirds of Angelenos and their apparent refusal to earn enough money to be able to afford a house? C'mon, guys, thinks of the real estate agents. The California Association of Realtors released data this week showing that fewer and fewer Californians can actually afford an average house: "The percentage of home buyers who could afford to purchase a median-priced, existing single-family home in California dropped to 36 percent in the second quarter of 2013" (down from 51 percent in the second quarter of 2012). This is the first time since the third quarter of 2008 (when Lehman collapsed) that the index has fallen below 40 percent. Meanwhile, in Los Angeles, only 37 percent of households can afford a median-priced house; that's down from 42 percent in the first quarter of 2013 and from 49 percent in the second quarter of 2012. The median home price in LA County is $378,390, which translates to a monthly payment (with taxes and fees) of $1,820. A buyer would have to be making $72,730 to cover that mortgage, according to CAR.
According to the LA Times, rising interest rates are part of the problem (CAR used a 3.64 percent rate), but it's also just, you know, rising prices. (We appear to be in some kind of bubble, if you haven't noticed.)
If you're looking for a place where you can still afford a house, try: Madera County in the Central Valley, where 71 percent of potential buyers can afford a median-priced house. Or if you have a ton of money and only want to be around other people who have a ton of money: Orange County, the least affordable area in the state.
· Higher home prices drive down housing affordability during second quarter, C.A.R. reports [CAR]
· LA Had Biggest Home Price Increase of 100 Biggest US Cities [Curbed LA]