Good news, neighbors. Housing affordability in California improved a little in the third quarter of 2025. As a local Bay Area Realtor, I am sharing what the latest Housing Affordability Index (HAI) means for Fremont, Milpitas, Newark, Union City, and Hayward. Below is a simple breakdown of the current HAI and year over year change, the statewide median home price and income needed to purchase a median priced home, and what we are seeing locally. I also include opportunities for buyers and sellers and a few strategies that can help improve affordability.
Housing Affordability Index climbs slightly in Q3 2025
California’s HAI ticked up in Q3 2025, meaning a slightly larger share of households can afford the median priced home. About 17 percent of California households could afford the 887,380 dollar median priced single family home in Q3 2025, up from 16 percent a year earlier. This is a modest improvement from near record lows. Mortgage rates steadied, price growth cooled, and inventory improved a bit, which together helped buyers.
California median price and income needed
The statewide median price for a single family home was about 887,380 dollars in Q3 2025, roughly 0.8 percent higher than a year ago. Prices are basically flat to slightly up year over year. To afford a home at that price, the estimated minimum household income is about 223,600 dollars assuming 20 percent down and a 30 year fixed loan near 6.7 percent with taxes and insurance. By comparison, the U.S. median home requires far less income, which highlights the Bay Area affordability gap.
Bay Area snapshot: Fremont, Milpitas, Newark, Union City, Hayward
- Fremont: median sale price around 1.43 million dollars, about 3 percent lower year over year. Still competitive, average time on market about three weeks.
- Milpitas: median around 1.42 million dollars, about 7.5 percent higher year over year. Demand stays strong due to Silicon Valley proximity.
- Newark: median around 1.25 million dollars, about 2 percent lower year over year. Days on market about four weeks and a bit more room to negotiate.
- Union City: median around 1.30 million dollars, about 2 percent lower year over year. Somewhat competitive with sales in roughly a month.
- Hayward: median around 828,000 dollars, about 8 percent lower year over year. More approachable price point for first time buyers and still active.
Opportunities for buyers and sellers
Buyers: A cooler market plus slightly better affordability can open doors, especially in Hayward, Newark, and Union City. Get fully pre approved, consider condos and townhomes, and use the longer days on market to compare and negotiate.
Sellers: Price to the market and present the home well. In hot micro areas of Fremont and Milpitas you can still see strong interest, but expect fewer offers than peak periods. Consider incentives such as a 2 1 interest rate buydown or a credit toward closing costs to widen the buyer pool.
Strategies to improve affordability
- Down payment assistance: CalHFA MyHome may provide a deferred payment junior loan of 3 to 3.5 percent of the price for down payment or closing costs. See CalHFA for current details.
- Shared appreciation assistance: California’s Dream For All has offered down payment help in exchange for a share of future appreciation when funding is available. Watch for new rounds.
- Interest rate buydowns: A temporary or permanent buydown can lower the payment. In today’s market, some sellers will negotiate a buydown or closing cost credit.
- Creative approaches: Look for homes with ADUs or layouts suitable for partial rental income, and confirm local rules before renting.
Bottom line: Q3 2025 brought a small step forward for affordability while prices stabilized. In Fremont, Milpitas, Newark, Union City, and Hayward, conditions are closer to balanced. Buyers should prepare and explore assistance options. Sellers should price realistically and consider incentives. If you want a custom plan for your neighborhood, contact me anytime.
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Disclaimer: All information provided is deemed reliable, but is not guaranteed and should be independently verified.
This article is for general informational and educational purposes only. It is not intended to provide legal advice, tax advice, financial advice, or professional guidance of any kind. Readers should not rely solely on the information presented here when making decisions. Laws and regulations may change and individual situations vary. Always consult with a qualified attorney, tax professional, or financial advisor before taking any action related to the topics discussed.
Sources: California Association of Realtors, Zillow Research, Redfin Data Center, CalHFA.