If you want to buy a home in the Golden State, there’s a good chance you need an above-average income. Even if you’re not looking for a luxurious home, California cities have some of the highest average real estate prices in the nation, making it hard to keep mortgage payments affordable.
According to an analysis by Redfin last year, the average homebuyer needs to earn $114,627 in household income to affordably buy a median-priced home in the US. That affordability is based on keeping mortgage payments — which averaged $2,866 in August 2023 — at a maximum of 30% of gross income. Yet this income is approximately $40,000 more than the average household earns, noted Redfin.
Household incomes are higher than average in California, but not necessarily enough to close the gap with housing costs. The median household in California earns $85,300, based on the latest Census Bureau data from 2022. And many California cities have higher-than-average housing costs.
In analyzing the 100 most populous metros in the US based on available data, Redfin found that the top seven most expensive markets are all in California.
Here’s how much you need to earn in 10 California metros to afford an average home.
10. San Francisco
In San Francisco, you need an annual household income of$404,332 to afford an average home. This is the most expensive market in the country, with a median monthly mortgage price of $10,108, according to Redfin.
9. San Jose
Following closely behind San Francisco is the Silicon Valley city of San Jose. Here, you need an annual household income of $402,287 to afford the median monthly mortgage payment of $10,057.
8. Anaheim
High housing costs aren’t exclusive to the Bay Area. You can also find median housing prices above $1 million in Anaheim, which requires an average household income of $300,010 to afford a median-priced home with a $7,500 per-month mortgage.
7. Oakland
Across the Bay from San Francisco, you can find less expensive housing in Oakland, but you still need an above-average income to afford a median home here. Specifically, Redfin finds you need $249,554 in household income to afford the median monthly mortgage payment of $6,239.
6. San Diego
Things don’t get much more affordable as you head to the southern tip of the state. In San Diego, the median mortgage cost is $6,034, which means you need at least $241,372 in annual household income to make that affordable.
5. Los Angeles
The City of Angels is much less expensive than San Francisco and San Jose, but housing costs are still way above the national median. In Los Angeles, you need a household income of $237,281 to afford an average monthly mortgage of $5,932.
4. Oxnard
Even if you don’t live in one of the bigger cities in California, you still might pay high housing prices. In Oxnard, a coastal city around 60 miles northwest of Los Angeles, housing prices average $855,000, which equates to a $5,830 monthly mortgage cost. To afford that, you’d need to earn at least $233,190.
3. Sacramento
California’s capital city of Sacramento might be more within reach for homebuyers, but you still need an above-average income of $156,824. Here, the median home sells for $575,000, equating to a $3,921 monthly mortgage payment.
2. Fresno
If you go more inland, you might be able to find more affordable homes in California. In Fresno, for example, the average mortgage payment is $2,857 per month, which means you need $114,275 in household income. That’s just below the average income needed to afford a home across the US, based on Redfin’s analysis.
1. Bakersfield
Lastly, if you’re looking for a more affordable home in California, you might turn to Bakersfield. You still need an above-average household income of $100,258 to afford the median monthly mortgage cost of $2,506, but that’s less than the $114,627 average that homebuyers need to afford a home nationwide, according to Redfin.