“How expensive?” tracks measurements of California’s totally unaffordable housing market.
Buzz: San Diego County house hunters face potential house payments double what they were five years ago.
Source: My trusty spreadsheet tracked this yardstick of affordability by looking at its 37-year history of CoreLogic homebuying stats through November and swings in the 30-year fixed mortgage rate from Freddie Mac. Estimated payments were calculated by combining a month’s median sales price and mortgage rate.
The pain
A typical San Diego County buyer in November got a $5,800 monthly payment, assuming a 20% downpayment. That’s the seventh-highest since 1988. Yes, it’s 2% below a year ago but it’s up 112% in five years.
Adding to local homebuying’s financial challenge are the wages required to complete a purchase. If this hypothetical buyer spends 40% of their income on this payment, they’d need to earn $174,000 a year – plus have $177,600 in cash for the downpayment.
Pressure points
Why? Start with November’s $888,000 San Diego County median sales price – fourth-highest since 1988. It’s 4% above a year ago and 49% over five years.
Compound that with mortgage rate gyrations. Yes, November’s 6.8% is below 7.4% a year earlier but it’s equal to 6.8% two years ago and well above 3.7% of five years ago and a 6.2% average since 1988.
Bottom line
Stubbornly lofty prices and rates add up to dramatically slower homebuying in San Diego County.
Contemplate that buyers completed 2,310 transactions a month on average during the last two years, a pace 37% below the previous two years and 38% slower than sales counts since 1988.
Or look at the slump this way: Only 6% of all two-year periods since 1988 have fewer sales.
PS: The best news for house hunters is growing choice.
Countywide, there were 3,580 average active listings of existing homes during the past year, according to Realtor.com. This supply of residences for sale is 44% above the previous 12 months – but 44% smaller than pre-pandemic 2019.
Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com
