CALIFORNIA – Realtor.com published a report, April 24, grading California an “F” on how well the state is addressing housing affordability.
The report said it has become harder and harder to become a homeowner, with high prices and mortgage rates remaining the unfortunate reality.
The California Association of Realtors (CAR) reported that March’s statewide median home price was $884,350, up 6.7% from February.
Realtor.com said the clear solution is increasing the supply of homes.
California scored low in affordability and homebuilding
The U.S. is currently facing a 4 million home supply gap, according to the website.
To show the progress toward closing the gap across different regions of the United States, it assigned grades to each state.
Realtor.com researcher Joel Berner gave California an affordability score of 0.43, on a scale where 2 is the highest possible score.
“As a general rule, we say that a home is affordable if the mortgage payment on it makes up 30% or less of a household’s monthly income,” said Berner.
All 50 states and Washington, DC, scored lower than 1 in this metric.
The report also found that California has 6.8% of new home permits but 11.7% of the population, giving it a low ratio of permits to people at 0.58.
South Carolina, Texas and Iowa have more permissive local zoning
The report concludes that the South and Midwest are home to all of the top grades along its affordability and homebuilding criteria.
Berner says South Carolina, Texas and Iowa have more permissive local zoning and a focus on delivering competitively priced new inventory.
States with lower grades including California, may be places where homeownership is a difficult goal to attain, at least for now. The path to owning a home in these states may be longer, and may include longer periods of renting, according to the site.
