At a price that's more than double the national median for a single-family home, California's residential real estate climate is growing increasingly out of the reach of aspiring home buyers. Making affordability conditions worse were rising mortgage rates in the penultimate quarter of 2015, according to newly released data from the California Association of Realtors.
In the third quarter, the typical single family residence in California sold for a median total of approximately $487,400, CAR reported. Over the same three-month period, the national median was $229,000, based on estimates from the National Association of Realtors.
Californians need six-figure salary to buy median-priced house
Just under 30 percent of Californians in the quarter were able to afford this price point, CAR revealed from its numbers. That's on pace with the same time last year, when 29 percent were able to come up with the appropriate funding. In order to keep up with monthly mortgage payments for a 30-year fixed-rate loan, the average homeowner would have to earn an estimated $98,400 per year, assuming the monthly payment was around $2,500 per month.
For almost the entire year, average mortgage rates have stayed below 4 percent, making it one of the most affordable times in history to be in the residential real estate marketplace. The Federal Reserve is considering raising short-term interest rates, perhaps before 2016 due to signs that the economy may be improving, thereby justifying the rate hike.
Mortgage rates up for second straight week
For the second time in as many weeks, mortgage rates have trended higher all across the country. During the week ending Nov. 12, 30-year FRMs averaged 3.9 percent, up from 3.8 percent at this time last week but still below year-ago levels when it was 4.0 percent, government sponsored enterprise Freddie Mac reported from its most recent Primary Mortgage Market Survey.
Even a modest uptick in mortgage rates can determine the viability of being able to make regular mortgage payments, especially if the market already commands top dollar, like it does in California. Of the five most expensive housing markets between July and September, four were in the Golden State, including San Jose, San Francisco, Anaheim and San Diego, according to NAR's figures.
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