Home prices in some of California’s most populous cities continue to rise, according to a study from Redfin.
Potential homeowners looking to buy a home in Anaheim, Oakland, San Diego, Los Angeles, and Oxnard need to make at least six figures, the researchers found.
These metros are the most expensive markets in the country, according to the study.
To buy a home in these cities, people must:
- $300,000 if they plan to move to Anaheim
- $250,000 if they plan to move to Oakland
- $241,000 if they plan to move to San Diego
- $237,000 if they plan to move to Los Angeles
- $233,000 if they plan to move to Oxnard
The high income required to buy a home in California is not just an issue in the Golden State. The researchers found that homebuyers would need to earn about $115,000 to afford a median-priced home in the U.S. — about 15% higher than a year ago and more than 50% more at the beginning of the pandemic.
A $115,000 salary is “the highest annual income needed to buy a home on record,” according to the study.
The study also noted that mortgage payments are at an all-time high, with the average monthly payment being $2,866, a 20% increase from last year.
“In a home buyer’s ideal world, rising mortgage rates would drive demand and house prices down enough to offset high-interest payments. But that’s not the case today: Even when new listings are few, inventory is near record lows as homeowners hang on to their low mortgage rates—and that drives up prices,” said Redfin Economics Research Lead Chen Zhao in a statement.
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Zhao explained that people interested in owning a home now should consider buying a condo or townhouse, which are often cheaper than single-family homes. Moving to states with cheaper housing prices is also an option, according to Zhao.
However, it is not impossible to buy a house in California completely. A June study from Go Banking Rates found that people with a fixed budget but location flexibility can buy a home for less than $200,000 in the Golden State.