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Only 16% of Californians can afford to buy home as mortgage rates rise

By John Gittelsohn | Bloomberg

Buying a home in California slipped further out of reach as interest rates climbed and scarce inventory bolstered prices.

Only 16% of households could qualify to purchase a median-priced single-family home in the second quarter, the California Association of Realtors reported Friday. That’s down from 19% in the first quarter and 17% a year earlier.

The state faces an affordability crisis that threatens to hamper growth in the economy and population. People and companies have left California, or chosen not to move there because housing is so much more expensive than in most of the US.

“In the long run — three or four years — we’ll see tight supply and lower affordability will trim the competitiveness of California if nothing is done to increase the supply of housing,” Oscar Wei, deputy chief economist for the state Realtors group, said in an interview.

Nationally, more than a third of households could afford to purchase a $402,600 median-priced home, according to the report.

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