Housing Affordability Peaked Q1 2012

Prices v. Low Rates and Income Growth

California vs. U.S. 1984-2016
80%
Annual Quarterly
% OF HOUSEHOLDS THAT CAN BUY A

70% CA US
58%
60%
MEDIAN-PRICED

50%
HOME

40%

30%
31%
20%

10%

0%

SERIES: Housing Affordability Index of Traditional Buyers

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS
 Housing Affordability Traditional Index
California: 2006-2016
60%
% Of Households That Can Buy A

50%
Median-priced Home

40%

30%

20%

10%

0%

SERIES: Housing Affordability Index of Traditional Buyers

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS
 Affordability Peak vs. Current
HAI Peak vs. Current
Q4-2016 Q1-2012

70% 69% 67%

60% 59%
48% 50%
50%
40% 34%
30%
20%
10% 58%
31% 40% 34% 46% 25%
0%
US CA SFH CA Condo / Los Angeles Inland Empire S.F. Bay Area
Townhomes Metropolitan
Area

SERIES: Housing Affordability Index of Existing Detached Homes

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS
 Minimum Annual Income Required During
Affordability Peak vs. Current

Region 2012 Q1 2016 Q4 % CHG

CA SFH $56,320 $100,800 79%
CA Condo/Townhomes $44,440 $81,550 84%
Los Angeles Metropolitan Area $53,780 $91,280 70%
Inland Empire $35,170 $62,630 78%
S.F. Bay Area $90,370 $157,140 74%
US $32,000 $46,320 45%

SERIES: Housing Affordability Index of Existing Detached Homes

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS
 Monthly PITI During Affordability Peak
vs. Current

Region 2012 Q1 2016 Q4 % CHG

CA SFH $1,410 $2,520 79%
CA Condo/Townhomes $1,110 $2,040 84%
Los Angeles Metropolitan Area $1,340 $2,280 70%
Inland Empire $880 $1,570 78%
S.F. Bay Area $2,260 $3,930 74%
US $800 $1,160 45%

SERIES: Housing Affordability Index of Existing Detached Homes

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS
 Median Monthly Mortgage Payment - CA
What Will Happen When Mortgage Rates Increase?
MONTHLY MORTGAGE Q4-2016 Median Price $511,360
$2,800 $2,586
20% Downpayment $2,453
$2,323
$2,400 $2,196
$2,073
$1,953
$2,000 $1,837
$1,725

$1,600

$1,200

$800

$400

$0
3.0% 3.5% 4.0% 4.5% 5.0% 5.5% 6.0% 6.5%
INTEREST RATE

SERIES: Housing Affordability Index

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS
 Minimum Qualifying Income - CA
What Will Happen When Mortgage Rates Increase?
Minimum Qualifying Income Q4-2016 Median Price $511,360
$140,000 20% Downpayment $126,951
$121,630
$116,433
$120,000 $111,365
$106,434
$101,645
$97,002
$100,000 $92,512

$80,000

$60,000

$40,000

$20,000

$0
3.0% 3.5% 4.0% 4.5% 5.0% 5.5% 6.0% 6.5%
INTEREST RATE

SERIES: Housing Affordability Index

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS
 Housing Affordability Index - CA
What Will Happen When Mortgage Rates Increase?
50%
% OF HOUSEHOLDS THAT CAN BUY, ALL ELSE CONSTANT Q4-2016 Median Price $511,360
20% Downpayment
40% 35%
33%
31%
29%
27%
30% 25%
24%
22%

20%

10%

0%
3.0% 3.5% 4.0% 4.5% 5.0% 5.5% 6.0% 6.5%
INTEREST RATE

SERIES: Housing Affordability Index

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS
 Housing Affordability In CA: by county

2016-Q4: % able to purchase median-priced home

70

60 58 56
55 54
50 49 49
50 48 48 46
45 45 43
41
39
40
31 31
30 28 27 26 26
26 25
22 22 22 21
20
20 17
15 13
10

SERIES: Housing Affordability Index of Traditional Buyers

SOURCE: CALIFORNIA ASSOCIATION OF REALTORS