The surge in home prices compared with income growth in the 10 largest California metros during the past six years illustrates the scope of The Golden State's affordability crisis.
Based on an analysis using pay stats from the US Bureau of Economic Analysis and housing indexes by mortgage tech firm ICE, average monthly mortgage payments in California have doubled during this period while typical incomes rose about 36%, the Orange County Register reported.
In 2018, payments on a median-priced home purchase ran slightly more than $2,000 monthly with an average 4.3% mortgage rate, assuming a 20% down payment. The monthly payment accounted for 22% of the average income for a household of two, which was about $109,000.
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Today, the same household is earning an average of $149K, but with median prices up to $760K and rates at about 6.9%, monthly payments have doubled to $4,000 and consume nearly 32% of income.
Only two of the top 10 California metros have seen income growth outpace surging home values since 2018: San Jose, which has recorded 54% income growth while home values have grown 34%, and San Francisco, where 46% income growth outpaced a 26% increase in home values.
In Los Angeles and Orange County, home values have surged 50% while income grew 39%, with prices outpacing income gains by similar margins in other markets, including San Diego (66% vs. 39%); Bakersfield (63% vs 29%); Inland Empire (65% vs. 37%); Fresno (60% vs. 33%); Ventura County (51% vs. 36%); Sacramento (46% vs. 35%); and Stockton (50% vs. 35%).
Home prices remain near record levels in Southern California, with a median price of $775K in October, slightly less than the record of $780K in July, according to CoreLogic. October prices were up in all six SoCal counties, with San Bernardino’s median price hitting a record $525K.
Despite hefty prices, buyers are beginning to come back into the market in Southern California. Home sales in the region rose 10% in October to 14,662. In Los Angeles County, sales were up 15.3% in October, notching 4,899 transactions, while the median price rose 5% to $875K.
Sales ticked up 4.7% to 1,994 transactions in Orange County in October, while the median home price rose 6% to $1.15M.
The affordability crisis is reflected in the median age of first-time home buyers, which has risen to 38 nationally, the highest on record, according to 2024 data from the National Association of Realtors.
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