Home buyers across Southern California must earn more than $200,000 a year to qualify for a typical house mortgage.
Families needed to rake in at least $200,800 to buy a typical single-family home that cost $785,000 within the six-county region in the first quarter, the San Bernardino Sun reported, citing affordability figures from the California Association of Realtors.
The qualifying earnings standard for a mortgage has shot up 38 percent, or $54,800, since the same period in 2022, when the Federal Reserve began hiking interest rates to combat inflation.
Across the U.S., home hunters must make $99,600 a year to qualify for a typical $389,400 house, meaning that in California, the requirement is more than double the national average. In two years, the national threshold has risen 36 percent, or $26,400.
Household incomes in Southern California are 16 percent higher than the nation – $86,000 versus $74,000. Yet SoCal buyers must earn 100 percent more to buy a home.
Just 15 percent of residents across the Southland earn enough to buy a home this year, compared to 24 percent in early 2022, according to the Sun.
Nationwide, affordability ran at 37 percent at the start of this year, down from 47 percent two years ago.
In the first three months of the year, the cost of financing a home jumped to 6.8 percent for the average 30-year mortgage, from 3.8 percent in 2022’s first quarter. That drove the typical SoCal monthly house payment to $5,020, a 38 percent increase.
The affordability gap has made for fewer home sales. In the first quarter, 37,211 houses, townhomes and condos were sold in six Southland counties, 37 percent fewer than in early 2022.
The amount of income required to buy a home varied across Southern California, according to the Sun.
In Orange County, families needed to earn $349,200 to qualify in the first quarter for a typical $1.37 million home. Some 11 percent of residents qualify, versus 13 percent two years ago.
In Los Angeles County, families needed to earn $210,400 for a typical $823,000 house. Some 14 percent qualify, versus 20 percent two years ago.
In Riverside County, families needed to earn $161,200 for a typical $630,000 house. Some 20 percent qualify, versus 28 percent two years ago.
And in San Bernardino County, families needed to earn $124,800 to qualify for a $488,000 house. Some 27 percent qualify, versus 39 percent in 2022.
— Dana Bartholomew
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