A recent report from the National Association of Realtors revealed that having a six-figure income may not be enough to buy a home in some California cities. In fact, the study showed that households in some areas of the Golden State must earn more than $200,000 a year just to qualify for a median-priced home.
Topping the list is the San Jose-Sunnyvale-Santa Clara area, where prospective homeowners must earn a whopping $482,835 to purchase a median-priced single-family home. Not far behind are other coastal cities such as Anaheim-Santa Ana-Irvine and San Francisco-Oakland-Hayward, where households must earn $340,595 and $339,290, respectively.
Not surprisingly, these high-income requirements are often found in large urban centers where housing prices are often prohibitively high. California, known for offering desirable but scarce homes, has consistently maintained high home prices.
Interestingly, the report also highlights significant differences in housing affordability in different areas of the United States. In contrast to expensive coastal cities, Decatur, Illinois, has the distinction of being the cheapest metropolitan area. Buyers in this city only need a household income of $33,459 to purchase a home.
It is important to note that although a high income is necessary to enter the real estate market in expensive cities, this does not always translate into financial success or security. Concerns about affordability continue, especially for those who cannot meet these income thresholds. It is therefore imperative that policymakers respond to the affordability crisis and explore new solutions to ensure housing is more affordable for everyone.