The new sign that Sacramento’s housing affordability crisis may be easing ever so slightly

The Sacramento region’s housing affordability crisis has eased. Very, very slightly.

The percentage of home buyers who could afford the median-priced single family home in Sacramento County ticked up in the third quarter of 2022 to 29%, up from 27% in the previous quarter, according to new data from the California Association of Realtors. Placer, El Dorado and Yolo counties also saw affordability numbers increase slightly.

Median prices have been steadily falling in recent weeks. Sacramento appraiser and real estate market analyst Ryan Lundquist reported last week that the median price in the region “is officially below last year.” According to Lundquist’s analysis, “40% of pandemic price gains have been wiped away over the past six months.”

That’s the good news for buyers. However, the region’s affordability measurements are still far worse than they were just one year ago. And in 2019, nearly half the households in Sacramento and Placer counties could afford a median-priced home.

“After remaining mostly unchanged for several years, the annual household income necessary to afford a monthly mortgage payment began climbing at the beginning of last year due to the pandemic homebuying boom and rapid rise in prices,” Redfin data journalist Dana Anderson wrote on the company’s site this week.

According to Redfin’s analysis, the monthly mortgage payment on a median-priced home in the Sacramento region has increased nearly $1,000 since last year. That’s despite the median sale price here being equal — or even a bit below – where it was in 2021.

The primary culprit is the historic increase in mortgage rates this year. While rates have fallen in recent weeks, the typical 30-year mortgage rate is still around 6.5%, roughly twice what it was at the start of the year.

That means it requires a household salary of around $145,000 to afford the median-priced home in the Sacramento region, up from $105,000 last year, according to Redfin. That’s a significant increase, but is far below the spikes seen in most other markets in the country.

For instance, it requires 64% more salary to afford a home in Miami today than it did at this time last year. Of the 93 metro areas analyzed by Redfin, the minimum salary to afford a home has increased by at least 50% in 40 regions.

In Sacramento, the salary it takes to afford a median-priced home is up 38.4% since last year, according to Redfin. Just seven markets had lower increases, including San Francisco, Oakland and San Jose.