Housing affordability becoming issue again

Posted: 5/06/2016

The housing market in California has seen some great gains in many areas over the past three years, but some areas have remained depressed and affordability remains a major issue for prospective homebuyers. Driven by high tech jobs, The San Francisco Bay Area has reigned as one of the fastest appreciating and moving markets in the country. With high dependency on oil and gas jobs, many central valley cities such as Bakersfield and Fresno have seen an increase of properties for sale, which has caused prices to stagnate.

As we start the prime home buying season, there has been a noticeable lack of available and affordable properties for sale even as we continue with a housing market recovery. High cost homes are now hurting sales activity with what is now seen as a record low for housing affordability. Despite historically cheap mortgage rates, financing problems and stagnant middle class California wages have caused many to remain on the sidelines for a home purchase.

Last month, California’s median selling price was $415,000, which is the highest level since 2007. Lenders have been very cautious about who they will give loans to as the minimum standards for loans have been increased in an effort to avoid another housing market crash. It was just ten years ago housing affordability was the main housing market issue, which caused the banks to develop new and looser lending guidelines.