A lack of supply and strong job growth have pushed California home prices out of reach of the typical buyer.
NAR’s Economists’ Outlook blog calculated the income needed to comfortably afford a median-price home in the state’s largest metros, including Los Angeles, San Diego, and San Francisco.
At the top of the list is San Jose, which has a median home price of $1.07 million. To afford a mortgage payment on a fixed rate 30-year mortgage that is no more than a quarter of the household income, a two-earner family would need to make $232,940 a year to own a home in the area. The recommended income exceeds the actual median income of two-earner households in San Jose, which sits at $165,546.
Two-income households need to earn $177,427 in San Francisco, $163,276 in Anaheim, and $122,784 in San Diego to afford a median-price home in those metros without being cost-burdened. In all of those metros, the recommended income is higher than the actual median two-earner income.
Los Angeles ($105,759 recommended income for a two-earner household), Riverside-San Bernardino ($71,079), and Sacramento ($69,599) have homes that are a bit more attainable for two-income families. In those metros, the recommended income is a higher number than the actual median income.