Roughly three out of four Los Angeles residents can’t afford to buy home at the county’s $553,000 median price, which is more than twice the nationwide average.
The California Association of Realtors’ Housing Affordability Index found that buyers need a minimum annual household income of around $111,000 to afford a new home, according to Curbed. Monthly payments, including insurance and taxes would work out to around $2,800, with a 20 percent down payment, the study found.
With that math, a household would be paying 30 percent of its income on the mortgage payment; any more would be considered burdensome. The high cost of buying a home could be a reason why more than three-quarters of people surveyed by Freddie Mac last summer believed that renting was a more affordable option than buying, an increase of 10 percent from the year before.
The percentage of Californians who could afford a median-priced home peaked from around early 2009 to early 2012, then dropped sharply over the course of 2012. It has stayed below around 35 percent ever since. The minimum annual income needed to afford a home has doubled from around $53,000 in the five years since the affordability peak in the first quarter of 2012.
Still, Los Angeles County is not the most expensive in Southern California — Orange County tops the list with a median price of $785,000. The median price in San Diego and Ventura County both top $600,000, according the Association of Realtors study.[Curbed] – Dennis Lynch