Buying a home in much of California has become a hard-to-imagine dream for many hardworking residents, as higher mortgage rates and near-record prices offset pay raises during the first quarter.
Fewer than one of every six (17%) households in the state could afford to buy the median-priced home, a bit better than the 15% compared to the fourth quarter – but the same rate as a year ago, according to the California Association of Realtors.
Maybe a more sobering figure – only 13 of the 53 counties surveyed were affordable for at least one of every three (33%) households. None were in the higher-income and large population regions of the Bay Area, the Sacramento region or Southern California.
BUYERS WOULD NEED TO EARN AT LEAST $218,000
For those households able to buy in California, they would need to earn at least $218,000 to qualify for a mortgage with a 20% down payment on the median-priced home in the state. The monthly mortgage payment would be $5,450.
Some of the least affordable – or priciest, if you prefer – are on the Central Coast, from Santa Barbara to Santa Cruz, and Southern California (see table, below). The Bay Area boasts the highest prices, but residents often earn more money, thanks to the tech industry in the region.
But even in the more affordable Central Valley – from Bakersfield to Sacramento – the percentage of households able to buy has plummeted in recent years. Only Glenn and Kings counites had affordability rates of more than 33% during the first quarter.
Bottom line: Buying for many Californians is out of reach.
(Post continues after affordability table)
Affordability rate by county for Q1 2025
| City/County | Q5 ’25 affordability rate | Household income needed | Monthly mortgage payment |
|---|---|---|---|
| California | 17% | $218,800 | $5,450 |
| Bakersfield | 30% | $102,800 | $2,570 |
| Fresno | 29% | $112,000 | $2,800 |
| Los Angeles | 13% | $222,000 | $5,550 |
| Orange | 12% | $373,200 | $9,330 |
| Redding | 32% | $99,200 | $2,480 |
| Riverside | 20% | $164,800 | $4,120 |
| Sacramento | 26% | $141,600 | $3,540 |
| San Diego | 12% | $266,800 | $6,670 |
| San Francisco | 20% | $418,800 | $10,470 |
| San Jose | 18% | $520,000 | $13,000 |
| San Luis Obispo | 11% | $246,000 | $6,150 |
| Stockton | 28% | $137,600 | $3,440 |
Source: California Association of Realtors
SPRING COULD SPUTTER
And the home-buying season and sputtering economy could make purchases tougher.
“If history is a good guide, prices will rise as we head into the peak buying season that’s about to start, which will worsen affordability measures,” says Rob Barber, CEO of ATTOM Data. “With so much economic uncertainty these days connected to investment markets, federal policy shifts and very mixed economic forecasts, it is anyone’s guess how much prices will move.”
ATTOM’s affordability report, also based on a 20% down payment, found just as miserable news for home shoppers.
Eight of the 12 counties surveyed, from Redding to San Diego, required households to spend at least half of their income on the mortgage, including 98% in Orange County and 90% in Santa Barbara County. The closely watched report determines the figure based on home prices, mortgage rates, monthly payments and wages.
Percent of income needed for mortgage payment
- Bakersfield: 40.8%
- Fresno: 47.9%
- Los Angeles: 72.7%
- Orange County: 97.8%
- Redding: 43.2%
- Riverside: 70.8%
- Sacramento: 44.8%
- San Diego: 72.2%
- San Francisco: 52%
- San Jose: 54.2%
- Santa Barbara: 90.2%
- Santa Rosa: 74.6%
Source: ATTOM Data
The more “affordable” markets – Bakersfield, Fresno, Redding and Sacramento – required households to spend at least 40% of their income on mortgages, easily exceeding the 30%-32% rule that economists, financial advisers and housing experts advise.
“Affordability matters,” says Mike Simonsen, founder and president of Altos Research.
