For an existing single-family home at California’s median price of $830,620, buyers needed a minimum annual income of $208,000 to qualify for a 30-year mortgage after a 20% down payment

As interest rates rose and housing inventory remained scarce, the dream of homeownership in California moved even further out of reach for many prospective buyers.

According to a report from the California Association of Realtors, only 16% of households in the state were able to meet the qualification criteria for purchasing a median-priced single-family home in the second quarter. This marked a decline from 19% in the first quarter and 17% during the same period the previous year.

California is grappling with a severe affordability crisis that has the potential to impede both economic growth and population expansion. The high cost of housing in the state has prompted people and businesses to either leave California or opt against moving there in the first place, due to the stark contrast with more affordable housing markets in other parts of the United States.

Oscar Wei, Deputy Chief Economist for the California Association of Realtors, highlighted the long-term impact of these trends, explaining that over the course of three or four years, the combination of constrained housing supply and reduced affordability could diminish California's competitiveness if steps aren't taken to address the housing supply shortage.

In comparison to the national figures where over a third of households could afford a median-priced home at $402,600, the significantly higher California home prices make homeownership a greater financial hurdle. For instance, the median price for an existing single-family home in the state was $830,620, requiring an annual income of at least $208,000 to qualify for a 30-year mortgage after a 20% down payment. Condos and townhouses, with a median price of $640,000, necessitated a minimum income of $160,400.

Despite a 2.4% drop in single-family home prices across the state in the year leading up to June, monthly costs for buyers escalated due to the rise in mortgage rates, which hovered around 7%.

tastytrade logo+
Get the best broker for options trading and earn Unusual Whales discounted! in cash with an eligible account deposit at tastytrade. Get an Unusual Whales bonus when you deposit $2000. Offer expires 3/31/25. Certain restrictions, terms and conditions apply.
Unusual Whales does not confirm the information's truthfulness or accuracy of the associated references, data, and cannot verify any of the information. Any content on this site or related pages are not intended to provide legal, tax, investment or insurance advice. Unusual Whales Inc. is not registered as a securities broker-dealer or an investment adviser with the U.S. Securities and Exchange Commission, the Financial Industry Regulatory Authority (“FINRA”) or any state securities regulatory authority. Nothing on Unusual Whales should be construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any security by Unusual Whales or any third party. Options, investing, trading is risky, and losses are more expected than profits. Please do own research before investing. Please only subscribe after reading our full terms and understanding options and the market, and the inherent risks of trading. It is highly recommended not to trade on this, or any, information from Unusual Whales. Markets are risky, and you will likely lose some or all of your capital. Please check our terms for full details.
Any content on this site or related pages are not intended to provide legal, tax, investment or insurance advice. Unusual Whales Inc. is not registered as a securities broker-dealer or an investment adviser with the U.S. Securities and Exchange Commission, the Financial Industry Regulatory Authority (“FINRA”) or any state securities regulatory authority. Nothing on Unusual Whales should be construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any security by Unusual Whales or any third party. Certain investment planning tools available on Unusual Whales may provide general investment education based on your input. You are solely responsible for determining whether any investment, investment strategy, security or related transaction is appropriate for you based on your personal investment objectives, financial circumstances and risk tolerance. You should consult your legal or tax professional regarding your specific situation. See terms for more information.