Redfin's analysis reveals the staggering affordability crisis in some California cities, with homebuyers needing to spend a disproportionately high percentage of their income on housing.
Nationwide, Americans earning the median income need to spend 41.8% of their salary on housing to afford to own a median-priced home. Redfin's calculations assume a 6.72% mortgage rate and 15% down payment, and use household income data from the U.S. Census Bureau for 2023, adjusted for 2024 wage growth. And in certain metros, that burden is even higher.
In five California cities, homebuyers earning the local median income must put at least 67% of their income toward housing to afford a median-priced home — the most of anywhere in the U.S. Here's a closer look at each. Note that city rankings are based on the 50 largest U.S. metros, while national figures reflect the broader housing market through November 2024.California's housing market is notoriously expensive, especially in its largest metros. Strict zoning laws and high building costs make new construction difficult, while a strong job market and a concentration of wealthy residents has driven up demand, pushing prices even higher, according to a 2024 analysis of Zillow home values. The other California cities listed above also have ratios of nine or higher — nearly double the national median of 4.7. In contrast, Pittsburgh is the most affordable metro, according to Redfin's data, with a median-priced home costing just 25.3% of the local median income
HOUSING AFFORDABILITY CALIFORNIA REAL ESTATE MARKET MEDIAN INCOME HOME PRICES
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