If you want to buy a home in the Golden State, there’s a good chance you need an above-average income. Even if you’re not looking for a luxurious home, California cities have some of the highest average real estate prices in the nation, making it hard to keep mortgage payments affordable.
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According to an analysis by Redfin last year, the average homebuyer needs to earn $114,627 in household income to affordably buy a median-priced home in the US. That affordability is based on keeping mortgage payments — which averaged $2,866 in August 2023 — at a maximum of 30% of gross income. Yet this income is approximately $40,000 more than the average household earns, noted Redfin.
Household incomes are higher than average in California, but not necessarily enough to close the gap with housing costs. The median household in California earns $85,300, based on the latest Census Bureau data from 2022. And many California cities have higher-than-average housing costs.