More Californians can purchase a home in third-quarter 2025, compared to previous quarter and a year ago, C.A.R. reports
More Californians can purchase a home in third-quarter 2025, compared to previous quarter and a year ago, C.A.R. reports
SACRAMENTO, Calif., Nov. 6, 2025 — Cooling market competition and an increase in available housing helped moderate home prices and allowed more Californians to buy homes in the third quarter of 2025, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today.
Infographic: https://www.car.org/Global/Infographics/HAI-2025-Q3
- Seventeen percent of California households could afford to purchase the $887,380 median-priced single-family home in third-quarter 2025, up from 15 percent in second-quarter 2025 and up from 16 percent in third-quarter 2024.
- A minimum annual income of $223,600 was needed to make monthly payments of $5,590 (PITI) on a 30-year fixed-rate mortgage at an effective interest rate of 6.67 percent.
- Twenty-seven percent of homebuyers could afford the $649,990 median-priced condo or townhome; the minimum annual income required was $163,600 to make a monthly payment of $4,090.
According to C.A.R.’s Traditional Housing Affordability Index (HAI), housing affordability in California remained near its all-time low despite the quarter-to-quarter improvement. The effective composite mortgage interest rate declined for the second consecutive quarter to 6.67 percent in Q3 2025 (from 6.90 percent in Q2 2025), nearly reversing the increase seen over the prior year. While lower rates and improved inventory eased competition and moderated prices in the quarter, borrowing costs remain elevated relative to historical norms and could fluctuate in the months ahead.
The statewide median price for existing single-family homes moderated in Q3 2025 as market competition eased and supply improved. The monthly payment for a median-priced home (including taxes and insurance) fell 3.8 percent from the previous quarter but remained 1.3 percent higher than a year earlier, reflecting a slight year-over-year increase in the effective mortgage rate.
Compared with California, more than one-third (36 percent) of U.S. households could afford to purchase a $426,800 median-priced home in Q3 2025, which required a minimum annual income of $107,600 to support monthly payments of $2,690. Nationwide affordability edged up from 35 percent in both Q2 2025 and Q3 2024.
Key points from the Third-Quarter 2025 Housing Affordability report
- Quarter-to-quarter, affordability improved in 38 California counties (driven by slightly lower mortgage rates, higher incomes and softer home prices); affordability declined in 10 counties and was unchanged in five.
- Lassen (52 percent) remained the most affordable county in California; Amador and Tuolumne tied for second at 36 percent. Lassen required the lowest minimum qualifying income at $64,800 in Q3 2025.
- Mono (7 percent) was the least affordable county, followed by Monterey (9 percent); Los Angeles and Santa Barbara tied at 12 percent. San Mateo required the highest minimum qualifying income at $524,000.
- Borrowing costs near all-time highs continue to limit affordability improvements in many areas. Twenty counties tracked by C.A.R. either saw no change or declines in affordability compared with the same quarter a year ago.
- For additional data: See C.A.R.’s historical housing affordability data and See first-time buyer housing affordability data.
Selected summary metrics (Third Quarter 2025)
| Measure | HAI Q3 2025 | HAI Q2 2025 | HAI Q3 2024 | Median Price | Monthly PITI | Minimum Qualifying Income |
|---|---|---|---|---|---|---|
| California single-family home | 17% | 15% | 16% | $887,380 | $5,590 | $223,600 |
| California condo/townhome | 27% | 25% | 25% | $649,990 | $4,090 | $163,600 |
| United States (median) | 36% | 35% | 35% | $426,800 | $2,690 | $107,600 |
Note: Traditional Housing Affordability Indices were calculated using effective composite interest rates of 6.67% (3Q 2025), 6.90% (2Q 2025) and 6.63% (3Q 2024).
About the CALIFORNIA ASSOCIATION OF REALTORS®
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 roughly 190,000 members dedicated to professionalism in real estate. C.A.R. is headquartered in Sacramento.
SOURCE: CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.)