A new California Association of Realtors report found housing affordability improved in 2026, yet only 11% of Latino households could afford a median-priced home. The gap matters deeply in Los Angeles and across California, where Latinos make up a major share of future first-time buyers.
Amid a homebuying slump, a report from the California Association of Realtors found that housing affordability improved in 2025. Still, Latino households remained among the least able to buy homes in California.
The index, which began tracking annually in 2019, shows that only 11% of Hispanic or Latino households could afford a median-priced home. That rate matched Black households but lagged far behind Asian households (29%) and White households (23%).
The findings come even as California home prices posted their steepest decline since 2023 and statewide median incomes rose by $10,000, highlighting how affordability gains have not translated into equal access to homeownership for Latino buyers.
CAR economist Oscar Wei said the affordability index is based on home prices, interest rates and household income. Despite a 10% increase in affordability for Latino buyers compared to 2024, the gap with other groups persists.
According to CAR, those disparities are driven by wage inequities and ongoing barriers to credit access. Data from the Public Policy Institute of California show that many of the state’s lowest-income households are Latino and Black, with disproportionate impacts on women, young adults under 25, and people without college degrees.
Wei said lower interest rates could provide some relief but warned that a chronic shortage of housing continues to limit supply to opportunities for buyers, including Latinos trying to enter the market.
He pointed to the California Middle-Class Homeownership and Family Home Construction Act of 2026, a $25 billion ballot initiative backed by CAR that aims to build 190,000 new homes and expand access to ownership.
“It would help middle-income households be able to obtain a loan or down payment and that should allow them to actually get into a home,” Wei said.
Still, broader economic forces could complicate the outlook. Global inflation tied to the Iran war and oil supply disruptions has slowed expected interest rate cuts, which could delay further improvements in affordability.
“There is hope on the horizon,” Wei said. “If interest rates start actually coming down in the second half of the year, we will likely see a little more supply.”
