How do you achieve the American dream of buying a home? In San Diego, by making more than $250,000.
For hopefuls in California’s major metros, including San Diego, the household income required to purchase a median-priced home exceeds a quarter of a million dollars, or more than double the national income needed.
According to April housing data by Realtor.com, the national required household income to purchase such a home rose to $116,000, up $5,900 from a year ago, after accounting for the cost of tax and insurance.
But in San Diego the income needed is a whopping $259,000, just ahead of San Francisco, at $256,000.
That income is based on a median listing price of $1.05 million in San Diego and almost $1.03 million in San Francisco.
And the median household income for San Diego County? It’s just shy of $97,000, according to the Census Bureau – roughly 37% of the $259,000 called for in the data.
Danielle Hale, chief economist for Realtor.com, called California “a fascinating market” not only because of the “eye-popping” figures, but “because it is a microcosm of the variety we’re seeing in housing markets nationally.”
In some areas, like San Francisco,” she said in a news release, home prices have fallen enough to offset rising mortgage rates, and the income needed to buy a home has dropped. In other markets, including San Jose and Sacramento, price declines have been more modest yet rising mortgage rates have pushed required incomes higher.
“And finally, the majority of major U.S. markets see trends like we’re seeing in Southern California,” she explained. “In Los Angeles, Riverside and San Diego, rising home prices and mortgage rates have combined to push required incomes higher – in some cases like in these California markets, up by double-digits compared to one year ago.”
Affordability is even worse in San Jose, where a household income of $361,000 is needed to purchase a median-priced home, and in Los Angeles, where a household must bring in $298,000.
The large California markets also outpaced notoriously expensive New York, where the household income for homebuyers needs to be $218,000.
If you’re willing to make a move to a more affordable market, there are metro areas, mostly in the Midwest and South, that require a household income of less than $100,000 to to purchase a median-priced home.
The most affordable among them? Pittsburgh, Detroit and Cleveland, where those with household incomes ranging from $67,000 to $71,000 could jump into the housing market.
