Affordability gap narrowed for Hispanic/Latino households, but expanded for Black households

• Close to one-fifth (19 percent) of all Californians earned enough income to support the purchase of an $875,550 median priced detached home in 2025, up from 18 percent in 2024.
   
• Among ethnic groups in California, 29 percent of Asian households could afford a median-priced home in 2025, followed by 23 percent of White (non-Hispanic) households. Meanwhile, only 11 percent of Black households and 11 percent of Hispanic/Latino households had the same ability.
   
• Assuming a 20 percent down payment on an $875,550 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 6.71 percent interest rate.

SACRAMENTO, Calif., April 24, 2026 /PRNewswire/ -- Housing affordability for all California ethnic groups improved slightly in 2025 as mortgage rates moderated and home prices increased slightly, the CALIFORNIA ASSOCIATION OF REALTORS^® (C.A.R.) said today.

Nineteen percent of all Californians earned the minimum income necessary to buy a median-priced, detached home in 2025, compared to 18 percent in 2025. The share of Asian households earning enough to purchase a median-priced home increased to 29 percent, a one-percentage point gain from the previous year. White (non-Hispanic) household affordability also accelerated one percentage point to 23 percent in 2025.

While affordability among both Black and Hispanic/Latino households increased to 11 percent in 2025, up from 10 percent, the share of Black and Hispanic/Latino households who could afford to purchase a median-priced home in California was small relative to their Asian and White (non-Hispanic) counterparts, according to C.A.R.'s Housing Affordability Index. The pronounced gap in homeownership affordability among Black and Hispanic/Latino households underscores wage inequities and persistent barriers to credit access. Without significant intervention, these structural disparities could widen if interest rates remain elevated and home prices continue to rise.

The housing affordability gap remained wide in 2025, driven by slight increases in home prices and moderating, but-still elevated mortgage rates.  The difference in housing affordability between Black households and the overall population in California widened from a revised 8.3 percentage points in 2024 to 8.7 ppts* in 2025, while the gap for Hispanic/Latinos declined again from a revised 8.2 ppts in 2024 to 7.9 ppts in 2025.  While interest rates are projected to decrease further in 2026, the gap in housing affordability between ethnic groups will likely remain wide this year as home prices are expected to edge up in the next 12 months. 

According to the Census Bureau's American Community Survey, the 2024 homeownership rate for all Californians was 55.8 percent, 64.4 percent for non-Hispanic Whites, 61.6 percent for Asians, 45.9 percent for Hispanic/Latinos and 36.5 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 $4 million for 413 first-time home buyer households from an underserved community throughout California.

A minimum annual income of $221,200 was needed to qualify for the purchase of an $875,550 statewide median-priced, existing single-family detached home in 2025. 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 6.71 percent. The 2025 California median income for all households in 2025 totaled $103,312, compared to $134,987 for Asian households and $115,440 for White (non-Hispanic) households. The median income for Hispanic/Latino households was $87,886 and $73,102 for Black households — an income gap of 29 percent of all California households.

At the national level, 56 percent of Asian households and 43 percent of White non-Hispanic households could afford a median-priced single-family home in the U.S. in 2025. Meanwhile, only 35 percent of Hispanic/Latino households and 27 percent of Black households could afford to buy a 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.

Of the major regions where C.A.R. tracks affordability by ethnicity, the affordability gap between Black and the overall population in 2025 was the largest in Contra Costa (-14.7 ppts), Santa Clara (-14.0 ppts), and Fresno (-13.5 ppts).  Other counties with double-digit affordability gaps for Black households were Alameda (-13.4 ppts) and Sacramento (-10.8 ppts). Affordability gaps between Black households and the overall population at the state and national levels were -8.7 ppts and -13.9 ppts, respectively. 

For Hispanic/Latino households, the affordability gap was the biggest in Contra Costa (-10.5 ppts), Santa Clara (-10.2 ppts), Alameda (-9.4 ppts), and Solano (-9.4 ppts).  Affordability gaps between Hispanic/Latinos and the overall population at the state and national levels were -7.9 ppts and -5.1 ppts, respectively.    

At an affordability index of 7 percent, Santa Clara was the least affordable county for Black households, followed by Los Angeles (8 percent) and Alameda (9 percent).  Kern (33 percent), San Bernardino (23 percent), Riverside (23 percent) were the most affordable counties for the ethnic group.

The least affordable counties in 2025 for Hispanic/Latino homebuyers were Los Angeles County (9 percent), Orange (10 percent) and San Diego (11 percent).  The most affordable counties were Kern (33 percent), Sacramento (29 percent), and Fresno (28 percent).

For Asian households, Orange County was the least affordable, with 18 percent earning the minimum income required to buy a median-price home.  Kern was the most affordable county with 52 percent of Asian households having the minimum income required to buy a median-priced home. 

Orange County was also the least affordable county for White non-Hispanic households, with 15 percent earning the minimum income required to buy a median-price home. Kern was the most affordable at 38 percent.

*ppts = percentage points

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 nearly 190,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

CALIFORNIA ASSOCIATION OF REALTORS^{®
2025 Traditional Housing Affordability Index by Ethnicity}

*Assumes 20% downpayment.

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