Report – NBC 7 San Diego
Affordability remained a particular concern last year for black and Hispanic homebuyers in San Diego County, as home prices rose to record highs and interest rates jumped to levels not seen in more than a decade, the California Association of Realtors reported Wednesday.
In San Diego County, a minimum annual income of $206,800 was required to qualify for the purchase of an existing single-family home with a median price of $911,000 in 2022, assuming a 20% down payment. The monthly payment, including taxes and insurance on a 30-year fixed-rate mortgage would be $5,170, the association determined.
The bill would create a $1 billion program to loan first-time homebuyers 17% of their home’s purchase price, NBC 7’s Jackie Crea reports.
CAR also found that San Diego County had an 11% affordability gap between black people and the overall population last year. For Latino households, the association reported that the affordability gap was 9% in 2022.
With an affordability index of 7%, San Diego was among the least affordable counties in California for black households last year, according to CAR. The rate for Latinos was 9%, compared to 23% for Asians and 22% for the white/non-Hispanic population.
Statewide, 21% of residents earned the minimum income needed to purchase a median-priced home of $822,320 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% in 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%, respectively, in 2021. 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 prices remain high this year, CAR said.
Housing affordability across the country was better for Asians, but also fell from the previous year, with the index registering 31% of Asian homebuyers who could afford a 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 California population 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 homeownership rate in 2021 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 required to qualify for the purchase of the $822,320 statewide median-priced, existing single-family home in 2022, CAR determined.
The monthly payment, including taxes and insurance on a 30-year fixed rate loan would be $4,670, assuming a 20% down payment and an effective compounding rate of 5.47%. The median income in California in 2022 for whites was $105,640, $120,040 for Asians, $76,310 for Latinos and $64,190 for blacks — an income gap of nearly a third of the total population, which was $93,380, CAR reported.
A separate report from SmartAsset says you need a salary of at least $79,324 to live “comfortably” in the San DIE and Metro area.
Kevin and Charissa Pitre moved to Chula Vista from out of state and wanted to settle into an owner-occupied property where they could live out their retirement, but they saw firsthand how record prices and rapidly rising interest rates were pricing them out.
“In three months, 90 days, the interest rate went up to 6.3%,” said Kevin Pitre. “At that point, I knew it was over. There was no way we could afford it.”
The homeownership gap and inequality for communities of color could increase if the economy slows and prices remain high.
“There’s definitely a difference. But right now, financially, it’s a struggle for a lot of people,” said realtor Destiny Roxas.
She said she’s noticed an increase in families stepping in to help with down payments, especially in this higher-interest environment. She also hopes the California Dream For All program will help. It’s a prepaid plan that just launched late last month.
“I definitely think it’s an opportunity and a doorway that, you know, in so many different times in the past, a lot of people, people of color, have felt that the doorway was closed or just barely open. So I think this is a great way to kick the door open to home ownership,” Roxas said.