FINANCE
How much money do you need to make to buy a home in these areas of California?
California has the uneviable award of being the most expensive state to live in the US with households needing at least six figures to survive in every city.
Housing prices have been squeezed since the covid-19 pandemic. At the beginning of 2020, the median stood at $329,000. Nearly four years later and that has increased to $431,000, a 31% increase.
The 30-year fixed rate home loan stands around 7.5%, the highest rate seen in decades. Prices have started to come down slightly thanks to these higher rates, with the average median price $40,000 higher last year compared to today.
Despite this, homes are by no means affordable.
“You’re not getting a bargain. In most major markets, particularly east of the continental divide, home prices are at record highs, and the cost of financing the purchase is the highest in more than 20 years,” said Greg McBride, chief financial analyst at Bankrate.com.
This relative decrease is needed for new homeowners in California, which already had crazily high prices. The median price of a house in the state was $760,526 in June of this year.
The most expensive cities to live in California
California is a hub for various industries, particularly the tech sector in Silicon Valley. The job opportunities and high salaries attract people from all over the world, increasing the demand for housing. Building houses is the most expensive state in the country with strict regulations.
Indeed, California has some of the most unaffordable cities in the US according to Redfin:
The two most expensive metro areas are in California, with the most expensive, San Francisco, needing more than a combined $400,000 salary to survive.
Due to rising interest rates, mortgage payments are actually higher on average compared to last year even with falling house prices. Those people in San Jose have eye-watering payments of over $10,000 a month for their mortgage.