The Income Needed To Afford A Home In California’s Priciest Metros

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Households need to earn at least six figures to even think of living comfortably in Los Angeles or San Francisco

August 11, 2017
Homes in San Jose, Calif.

Homes in San Jose, Calif. Photo: Travis Wise/Creative Commons

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.

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