California housing affordability retreated in the second quarter after reaching a four-year high in early 2026, C.A.R. reports
Higher mortgage rates and rebounding home prices increased borrowing costs for prospective buyers.
- Nineteen percent of California households could afford to purchase the $916,750 median-priced home in the second quarter of 2026, down from 22 percent in the first quarter but up from 17 percent in the second quarter of 2025.
- A minimum annual income of $228,400 was needed to make monthly payments of $5,710, including principal, interest, taxes and insurance on a 30-year fixed-rate mortgage at a 6.54 percent interest rate.
- Thirty percent of home buyers could afford the $670,000 median-priced condo or townhome. A minimum annual income of $166,800 was required to make a monthly payment of $4,170.
SACRAMENTO, Calif., Aug. 5, 2026 /PRNewswire/ -- Housing affordability in California retreated in the second quarter of 2026 after reaching a four-year high in the previous quarter, as higher mortgage rates and rebounding home prices increased borrowing costs for prospective buyers, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today.
Infographic:https://www.car.org/Global/Infographics/HAI-2026-Q2
Nineteen percent of the state's home buyers could afford to purchase a median-priced, existing single-family home in California in the second quarter, down from 22 percent in the first quarter of 2026 but up from 17 percent in second-quarter 2025, according to C.A.R.'s Traditional Housing Affordability Index (HAI). While affordability improved from a year ago, it remained historically constrained as elevated mortgage rates and high home prices continued to challenge buyers throughout the state.
The second-quarter 2026 figure remains well below the affordability index peak of 56 percent recorded in the third quarter of 2012. C.A.R.'s HAI measures the percentage of all households that can afford to purchase a median-priced single-family home in California. C.A.R. also reports affordability indices for regions and select counties throughout the state. The index is considered the most fundamental measure of housing well-being for home buyers in the state.
The average effective mortgage rate increased for the first time in five quarters, rising to 6.54 percent in the second quarter of 2026 from 6.24 percent in the previous quarter, reaching its highest level since the third quarter of 2025. While still below the 6.90 percent rate recorded one year ago, mortgage rates remained volatile as geopolitical tensions in the Middle East, rising energy prices and renewed inflation concerns created uncertainty in the financial markets. While a temporary ceasefire in early June helped ease rates briefly, the recent resurgence of the conflict has pushed oil prices up again, renewed concerns about future inflation, and sent mortgage rates up near the 7 percent mark — the highest level in roughly a year.
The statewide median home price increased 8.7 percent from the prior quarter to $916,750 after three consecutive quarterly declines. On a year-over-year basis, the median price rose 1.1 percent, marking its first annual increase following two quarters of declines. The seasonal upswing was fueled by stronger buyer demand, supported by a temporary easing in mortgage rates during much of the quarter despite lingering economic uncertainty. As the housing market enters the final stretch of the traditional homebuying season, prices could edge higher, but gains are expected to remain modest.
A minimum annual income of $228,400 was needed to qualify for the purchase of a $916,750 statewide median-priced, existing single-family home in the second quarter of 2026. The monthly payment, including principal, interest, taxes and insurance (PITI), was $5,710, assuming a 20 percent down payment and an effective composite interest rate of 6.54 percent. The minimum qualifying income remained above $200,000 for the 14th time in the past 15 quarters, underscoring the ongoing affordability challenges facing California households.
More California households could afford a typical condo or townhome than a year ago, although affordability slipped from the prior quarter. Thirty percent of households could afford the state's median-priced condo or townhome in the second quarter of 2026, down from 32 percent in the first quarter of 2026 but up from 28 percent one year ago. An annual income of $166,800 was required to qualify for the monthly payment of $4,170 of a $670,000 median-priced condo or townhome.
Compared with California, nearly two-fifths (40 percent) of the nation's households could afford to purchase a $434,900 median-priced home in the second quarter of 2026. A minimum annual income of $108,400 was required to make monthly payments of $2,710. Nationwide affordability declined from 44 percent in the prior quarter but improved from 38 percent in the second quarter of 2025.
Key points from the Second-Quarter 2026 Housing Affordability Report include:
- Housing affordability declined in 44 of the 53 counties tracked by C.A.R., compared to the first quarter of 2026, while four counties improved and five remained unchanged. Compared to a year ago, affordability improved in 41 counties, declined in six and was unchanged in six others.
- Lassen County (50 percent) remained the most affordable county in California, followed by Glenn (43 percent) and Shasta (41 percent). Lassen also had the state's lowest minimum qualifying income requirement at $69,600 and was the only county with a median home price below $300,000.
- Mono County (6 percent) remained the least affordable county in the state, followed by Santa Barbara (12 percent) and Monterey (12 percent). Home buyers in each of those counties needed a minimum qualifying annual income of at least $242,800. San Mateo County required the highest qualifying income in California at $579,600, followed by San Francisco ($535,600) and Santa Clara ($510,800).
- The largest year-over-year affordability gains were recorded in Butte and Del Norte counties, each improving by six percentage points, followed by Lake, San Benito and Shasta counties, which each gained five percentage points. Plumas County posted the largest decline from a year ago, falling 11 percentage points.
- Lower mortgage rates helped improve housing affordability from a year ago across most of California. The mixed performance across counties illustrates how improvements in financing costs have been unevenly offset by local home price increases, leaving affordability historically constrained in many parts of the state.
- Despite improving from a year earlier, affordability remains near historic lows as elevated housing costs and borrowing expenses continue to limit homeownership opportunities across many California communities.
- See C.A.R.'s historical housing affordability data.
- See first-time buyer housing affordability data.
Leading the way…® in California real estate, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States, dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Sacramento.
CALIFORNIA ASSOCIATION OF REALTORS®
Traditional Housing Affordability Index
Second Quarter 2026
2nd Quarter 2026 |
C.A.R. Traditional Housing Affordability Index |
|||||
STATE/REGION/COUNTY |
Qtr. 2 2026 |
Qtr. 1 2026 |
Qtr. 2 2025 |
Median Home |
Monthly |
Minimum |
Calif. Single-family Home |
19 % |
22 % |
17 % |
$916,750 |
$5,710 |
$228,400 |
Calif. Condo/Townhome |
30 % |
32 % |
28 % |
$670,000 |
$4,170 |
$166,800 |
Los Angeles Metro Area |
17 % |
18 % |
14 % |
$860,000 |
$5,360 |
$214,400 |
Inland Empire |
25 % |
26 % |
21 % |
$605,000 |
$3,770 |
$150,800 |
San Francisco Bay Area |
22 % |
24 % |
20 % |
$1,420,000 |
$8,840 |
$353,600 |
United States |
40 % |
44 % |
38 % |
$434,900 |
$2,710 |
$108,400 |
San Francisco Bay Area |
||||||
Alameda |
22 % |
23 % |
20 % |
$1,350,000 |
$8,410 |
$336,400 |
Contra Costa |
27 % |
30 % |
25 % |
$920,000 |
$5,730 |
$229,200 |
Marin |
23 % |
26 % |
22 % |
$1,800,000 |
$11,210 |
$448,400 |
Napa |
23 % |
24 % |
20 % |
$910,000 |
$5,670 |
$226,800 |
San Francisco |
18 % |
20 % |
20 % |
$2,150,000 |
$13,390 |
$535,600 |
San Mateo |
18 % |
20 % |
18 % |
$2,327,000 |
$14,490 |
$579,600 |
Santa Clara |
22 % |
22 % |
19 % |
$2,050,000 |
$12,770 |
$510,800 |
Solano |
33 % |
34 % |
29 % |
$590,000 |
$3,670 |
$146,800 |
Sonoma |
21 % |
22 % |
19 % |
$870,000 |
$5,420 |
$216,800 |
Southern California |
||||||
Imperial |
29 % |
27 % |
26 % |
$430,000 |
$2,680 |
$107,200 |
Los Angeles |
17 % |
18 % |
15 % |
$879,900 |
$5,480 |
$219,200 |
Orange |
15 % |
16 % |
14 % |
$1,485,000 |
$9,250 |
$370,000 |
Riverside |
28 % |
29 % |
25 % |
$640,000 |
$3,990 |
$159,600 |
San Bernardino |
34 % |
35 % |
32 % |
$500,000 |
$3,110 |
$124,400 |
San Diego |
17 % |
17 % |
16 % |
$1,075,000 |
$6,700 |
$268,000 |
Ventura |
19 % |
20 % |
16 % |
$975,000 |
$6,070 |
$242,800 |
Central Coast |
||||||
Monterey |
12 % |
15 % |
12 % |
$975,000 |
$6,070 |
$242,800 |
San Luis Obispo |
16 % |
17 % |
16 % |
$970,000 |
$6,040 |
$241,600 |
Santa Barbara |
12 % |
12 % |
11 % |
$1,364,020 |
$8,500 |
$340,000 |
Santa Cruz |
16 % |
17 % |
15 % |
$1,332,500 |
$8,300 |
$332,000 |
Central Valley |
||||||
Fresno |
36 % |
37 % |
33 % |
$430,000 |
$2,680 |
$107,200 |
Glenn |
43 % |
44 % |
39 % |
$354,000 |
$2,200 |
$88,000 |
Kern |
37 % |
39 % |
35 % |
$410,000 |
$2,550 |
$102,000 |
Kings |
37 % |
40 % |
41 % |
$385,000 |
$2,400 |
$96,000 |
Madera |
35 % |
38 % |
33 % |
$440,000 |
$2,740 |
$109,600 |
Merced |
31 % |
34 % |
28 % |
$419,440 |
$2,610 |
$104,400 |
Placer |
34 % |
36 % |
31 % |
$680,000 |
$4,240 |
$169,600 |
Sacramento |
32 % |
34 % |
31 % |
$560,000 |
$3,490 |
$139,600 |
San Benito |
24 % |
25 % |
19 % |
$788,500 |
$4,910 |
$196,400 |
San Joaquin |
32 % |
34 % |
28 % |
$559,450 |
$3,480 |
$139,200 |
Stanislaus |
32 % |
34 % |
28 % |
$489,240 |
$3,050 |
$122,000 |
Tulare |
39 % |
40 % |
37 % |
$387,740 |
$2,420 |
$96,800 |
Far North |
||||||
Butte |
26 % |
28 % |
20 % |
$465,000 |
$2,900 |
$116,000 |
Lassen |
50 % |
61 % |
46 % |
$280,000 |
$1,740 |
$69,600 |
Plumas |
23 % |
45 % |
34 % |
$550,000 |
$3,430 |
$137,200 |
Shasta |
41 % |
39 % |
36 % |
$385,000 |
$2,400 |
$96,000 |
Siskiyou |
37 % |
37 % |
37 % |
$339,000 |
$2,110 |
$84,400 |
Tehama |
34 % |
38 % |
32 % |
$370,000 |
$2,300 |
$92,000 |
Trinity |
30 % |
32 % |
30 % |
$347,500 |
$2,160 |
$86,400 |
Other Counties in California |
||||||
Amador |
39 % |
38 % |
35 % |
$440,000 |
$2,740 |
$109,600 |
Calaveras |
33 % |
37 % |
33 % |
$499,000 |
$3,110 |
$124,400 |
Del Norte |
35 % |
40 % |
29 % |
$415,000 |
$2,580 |
$103,200 |
El Dorado |
34 % |
37 % |
33 % |
$715,000 |
$4,450 |
$178,000 |
Humboldt |
27 % |
30 % |
24 % |
$435,000 |
$2,710 |
$108,400 |
Lake |
31 % |
29 % |
26 % |
$345,000 |
$2,150 |
$86,000 |
Mariposa |
27 % |
30 % |
26 % |
$495,000 |
$3,080 |
$123,200 |
Mendocino |
25 % |
31 % |
23 % |
$533,750 |
$3,320 |
$132,800 |
Mono |
6 % |
6 % |
8 % |
$1,650,000 |
$10,280 |
$411,200 |
Nevada |
31 % |
39 % |
35 % |
$615,000 |
$3,830 |
$153,200 |
Sutter |
35 % |
37 % |
36 % |
$457,000 |
$2,850 |
$114,000 |
Tuolumne |
40 % |
43 % |
38 % |
$409,000 |
$2,550 |
$102,000 |
Yolo |
27 % |
32 % |
25 % |
$670,500 |
$4,180 |
$167,200 |
Yuba |
37 % |
38 % |
36 % |
$448,900 |
$2,800 |
$112,000 |
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SOURCE CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.)
