Homeownership slips further out of reach for all California ethnic groups amid rising mortgage costs, C.A.R. reports

Affordability gap for Black and Hispanic/Latino households remains wide

• Less than one-fifth (18 percent) of all Californians earned enough income to support the purchase of an $865,440 statewide median-priced detached home in 2024, down from 19 percent in 2023.
• Among ethnic groups in California, 21 percent of White households could afford a median-priced home in 2024. In comparison, only 10 percent of Black and 9 percent of Hispanic/Latino households had the same ability. Meanwhile, 27 percent of Asian households could afford a median-priced home.
• Assuming a 20 percent down payment on a $865,440 median-priced home, a minimum annual income of $221,200 was needed to make monthly payments of $5,530, including principal, interest, and taxes on a 30-year fixed-rate mortgage at a 6.84 percent interest rate.

Multimedia: 2024 Housing Affordability by Ethnicity motiongraphic

LOS ANGELES, April 24, 2025 /PRNewswire/ — Buying a home in California became less affordable for all ethnic groups last year, as interest rates remained elevated and the typical monthly mortgage payment for a median-priced detached home rose 6 percent compared to the previous year, the CALIFORNIA ASSOCIATION OF REALTORS^® (C.A.R.) said today.

Eighteen percent of all Californians earned the minimum income needed to purchase a median-priced home in 2024, down from 19 percent in 2023. At the same time, housing affordability for White/non-Hispanic households fell from 23 percent in 2023 to 21 percent in 2024. In 2024, 10 percent of Black households and 9 percent of Hispanic/Latino households could afford a median-priced home — figures that remained unchanged from the previous year. The significant difference in housing affordability for Black and Hispanic/Latino households illustrates the homeownership gap and wealth disparity for communities of color, which could worsen as the economy slows and rates remain elevated in 2025. Housing affordability was better for Asians but also declined from the prior year, with the index registering 27 percent of Asian homebuyers who could afford the median-priced home in 2024, down from 29 percent in 2023, according to C.A.R.’s Housing Affordability Index.

Housing affordability gaps narrowed again last year but remained wide as home prices increased and mortgage rates remained elevated. The affordability gap between Black households and the overall population in California narrowed from 8.9 percentage points in 2023 to 8.0 percentage points in 2024, while the gap for Hispanics/Latinos improved from 9.4 percentage points in 2023 to 8.3 percentage points in 2024. While interest rates are projected to dip slightly in 2025, the gap in housing affordability among ethnic groups will likely remain wide this year as home prices are expected to grow moderately in the next 12 months.

According to the Census Bureau’s American Community Survey, the 2023 homeownership rate for all Californians was 55.9 percent, 64.4 percent for non-Hispanic Whites, 61.5 percent for Asians, 45.9 percent for Hispanics/Latinos and 36.6 percent for Black households.

In an effort to address California’s growing housing affordability crisis and racial homeownership divide, C.A.R. continues to partner with nonprofit housing organizations to provide closing cost grants up to $10,000 for eligible first-time home buyers from an underserved community. Since its inception in 2022, C.A.R.’s Housing Affordability Fund’s Pathway to Home Closing Cost Assistance grant program has provided closing cost grants totaling $3 million for 312 first-time home buyer households from an underserved community throughout California. By the end of 2025, C.A.R. expects to have provided a total of $4 million to 415 first-time home buyer households since inception of the program.

A minimum annual income of $221,200 was needed to qualify for the purchase of an $865,440 statewide median-priced, existing single-family detached home in 2024. The monthly payment, including taxes and insurance on a 30-year, fixed-rate loan would be $5,530, assuming a 20 percent down payment and an effective composite interest rate of 6.84 percent. The 2024 California median income for Whites was $111,680, $128,720for Asians, $82,660 for Hispanics/Latinos and $70,220 for Black households — an income gap of nearly 30 percent that of the overall population, which was $99,310.

At the national level, 54 percent of Asian households and 41 percent of non-Hispanic White households could afford to buy a U.S. median-priced single-family home in 2024. Meanwhile, only 32 percent of Hispanic/Latino households and 24 percent of Black households could afford to buy a U.S. median-priced home.

C.A.R.’s Housing Affordability Index (HAI) measures the percentage of 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 within the state. The index is considered the most fundamental measure of housing well-being for home buyers in the state.

Key points from C.A.R.’s 2024 Housing Affordability by Ethnicity report include:

• Of the major regions where C.A.R. tracks affordability by ethnicity, the affordability gap between Black households and the overall population in 2024 was the largest in Contra Costa (-14 percent), Kern (-13.4 percent) and San Francisco (-13.1 percent). Other counties that had a double-digit affordability gap for Black households include San Mateo (-11.4 percent) and Santa Clara (-10.7 percent). The affordability gaps between Black households and the overall population at the state and the nation were -8 percent and -13.9 percent, respectively.
• For Hispanic/Latino households, the affordability gap was the biggest in Santa Clara (-10.3 percent), Contra Costa (-10.2 percent) and Solano (-9.8 percent). The affordability gaps between Hispanic/Latino and the overall population at the state and the nation were -8.3 percent and -6.2 percent, respectively.
• At an affordability index of 5 percent, San Mateo was the least affordable county for Black households, while San Joaquin (34 percent) and Fresno (31 percent) were the most affordable counties for the ethnic group.
• The least affordable counties in 2024 for Hispanic/Latino homebuyers were Orange County (7 percent), Los Angeles (8 percent) and San Mateo (8 percent). Conversely, the most affordable were San Bernardino (32 percent), Kern (30 percent) and Fresno (28 percent).
• For Asian households, Orange County was also the least affordable, with 14 percent earning the minimum income required to buy a median-price home. Kernwas the most affordable county with 59 percent of Asian households having the minimum income required to buy a median-priced home. 
  
• Orange County was the least affordable county for non-Hispanic White households, with 15 percent earning the minimum income required to buy a median-price home. Fresno was the most affordable at 43 percent.

Leading the way…^® in California real estate for 120 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States with 200,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

Contact:
Lotus Lou
(213) 739-8304
lotusl@car.org

SOURCE CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.)