SoCal homebuyer needs $73K raise to buy a median-priced house

In a bygone era two years ago, a typical family in Southern California needed to earn $134,000 to buy a median-priced house. The same family must now rake in $207,000.

A local house hunter needed a pay raise of $73,000 in the past couple of years to qualify for a median-priced, single-family home at $775,000 in December, the Orange County Register reported.

The 55 percent pay hike needed to achieve the American Dream put affordability to levels not seen since before the Great Recession.

Not only did the typical $775,000 home in Southern California cost 7 percent more than in late 2021, according to the Register, but the average mortgage rate more than doubled to 7.4 percent, from 3.3 percent.

That sent the typical buyer’s house payment up $1,830 in two years to $5,180 a month, from $3,350.

At the same time, rising house prices cramped the Realtors’ affordability rate — which found that only 14 percent of the region’s households could qualify late last year to buy a house, compared to 26 percent in late 2021.

The affordability measurement figures no more than 30 percent of a buyer’s income is spent on the mortgage, property taxes and insurance.

And that doesn’t include the 20 percent down payment of $155,000.

Statewide, a typical buyer needed to earn even more, largely because of even higher prices in the Bay Area. A buyer needed to earn $223,000 to qualify for a typical $833,000 home, with 15 percent of households able to qualify, compared to 25 percent in late 2021.

Residents in the Bay Area needed to earn $329,000 to buy a $1.23 million home, with 19 percent of households able to qualify, compared to 23 percent at 2021’s end.

The size of pay hikes needed to get into a house varied greatly across Southern California. In Orange County, households needed $348,000 to qualify for a $1.3 million home, with 11 percent of households meeting the threshold.

In Los Angeles County, households needed $236,000 to qualify for an $884,000 home, with 11 percent of eligible households. 

In Riverside County, the same household needed to earn $166,000 to qualify for a $619,000 home, with 19 percent eligible, compared to 32 percent in late 2021. In San Bernardino County, a household had to make $131,000 to qualify for a $489,000 home, with 24 percent eligible, versus 42 percent in 2021.

Last year, 16 percent of homes in California were priced at an affordable level for their areas, compared to 21 percent last year. A decade ago, 50 percent of homes were considered affordable, according to the San Francisco Chronicle.

— Dana Bartholomew

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