Particularly for Southland Blacks, Latinos
Affordability remained a particular worry last year for Black and Latino home-buyers in Los Angeles and Orange counties, as home prices soared to record highs and interest rates jumped to levels not seen in more than a decade, the California Association of Realtors reported this week.
Throughout the state, 21% of residents earned the minimum income needed to purchase a median-priced, single-family home of $822,320 home in 2022, down from 27% in 2021. At the same time, housing affordability for white/non-Latino households fell from 32% in 2021 to 26% last year, according to the association.
Meanwhile 12% of Black and Latino households could afford the same median-priced home in 2022, down from 16% and 17% in 2021, respectively.
The significant difference in housing affordability for Black and Latino households illustrates the homeownership gap and wealth disparity for communities of color, which could worsen as the economy slows and rates remain elevated this year, CAR said.
Housing affordability was better for Asians but also declined from the prior year, with the index registering 31% of Asian homebuyers who could afford the median-priced home in 2022, down from 38% in 2021, according to the association’s Housing Affordability Index.
CAR reported that the housing affordability gap between Blacks and the overall population in California improved from 11.7 percentage points in 2021 to 9.8 percentage points in 2022, while the gap for Latinos improved from 10.5 percentage points in 2021 to 9.4 percentage points in 2022.
According to the Census Bureau’s American Community Survey, the 2021 homeownership rate for all Californians was 55%, 63% for whites, 60% for Asians, 44% for Latinos and 37% for Blacks.
A minimum annual income of $186,800 was needed to qualify for the purchase of the $822,320 statewide median-priced, existing single-family home in 2022, CAR determined.
In Los Angeles County, a minimum annual income of $192,800 was needed to qualify for the purchase of a $849,410 median-priced, existing single-family home in 2022. The monthly payment, including taxes and insurance on a 30-year, fixed-rate loan, would be $4,820, CAR determined.