LOS ANGELES (CBSLA.com) — For the first time ever, the median single-family home price for any U.S. city hit above $1 million in one California housing market, according to the National Association of Realtors.
The median existing single-family price hit $1,085,000 in San Jose in the second quarter of 2016, the trade group announced Wednesday, making it the most expensive housing market in the nation. And, as usual, the top five most expensive housing markets were dominated by California – median prices hit $885,600 in San Francisco, $742,200 in the Anaheim-Santa Ana area and $589,900 in the San Diego area.
Home prices are being pushed higher because of low interest rates and slow home building activity across the country.
“Steadily improving local job markets and mortgage rates teetering close to all-time lows brought buyers out in force in many large and middle-tier cities,” NAR chief economist Lawrence Yun said in a statement. “However, with homebuilding activity still failing to keep up with demand and not enough current homeowners putting their home up for sale, prices continued their strong ascent – and in many markets at a rate well above income growth.”
In the Golden State, the median price of a single-family home hit $516,220, requiring home buyers to earn a minimum annual income of $101,217, according to the California Association of Realtors. This has caused the percentage of home buyers who can afford to purchase a median-priced existing single-family home to fall to 31 percent from the 34 percent recorded in the first quarter, according to the grade group’s Traditional Housing Affordability Index, but was slightly better than the 30 percent in the second quarter of 2015.
This is the 13th consecutive quarter that the index has been below 40 percent, and nearing the mid-2008 low level of 29 percent, according to CAR. The same index hit a peak of 56 percent in the first quarter of 2012.
The index, which measures the percentage of all households that can afford to purchase a median-priced single-family home in the state, is considered the best measure of housing well-being for home buyers in the state, according to the trade group.
The housing price pain was not restricted to single-family homes. Condominiums and townhomes also were slightly less affordable than in the previous quarter, with 40 percent of California households earning the minimum income to qualify for the purchase of a condominium or townhome, down from 41 percent in the first quarter.
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