Mapped: California Metros Where Homebuyers Have To Fork Out Biggest Share of Income To Afford a Mortgage

by Kiri Blakeley

Californians will need almost half their income to pay for a mortgage, making it the third least affordable state in the country, according to the Realtor.com® California State of Real Estate report.

For years, the standard advice was to not pay more than one-third of your income to keep a roof over your head, but that "rule" has become increasingly outdated.

"In none of the state’s major metros (those within the 100 largest, nationally, in terms of household count) is the median home affordable to the median-earning household by the 30% rule," says the report.

Golden Staters now need to spend 48.8% of their income to buy a house at the median state price tag of $697,000. The median household income is $95,065.

The state is behind only Montana and Hawaii and surpasses New York and Massachusetts in terms of how pricey it is to own a home.

The squeeze is even worse in the state's large metros. In Los Angeles, for instance, a household would need to spend a staggering 72.4% of its income on mortgage payments.

L.A. is followed by San Diego, Oxnard, San Jose, Riverside, San Francisco, Stockton, Sacramento, Fresno, and Bakersfield in terms of share of income needed to maintain median mortgage payments in the area.

"The large metro areas of California have always been challenging for buyers," Coldwell Banker agent Cara Ameer, who is licensed in both California and Florida, tells Realtor.com. "Most incomes have made it very difficult to afford a single-family home and that was before interest rates and insurance went up."

The big bite taken out of income keeps homeownership out of reach for many. Ameer says lots of Californians will choose or be forced to rent—forever.

"Their rent is more affordable than buying and they don’t have to be responsible for the additional costs with maintenance, upkeep, HOA fees, taxes and all that goes along with owning a property," she says.

For those who do scrape up enough to make those sky-high mortgage payments, they often don't have anything left over for renovations. So buyers prefer turnkey—and that doesn't mean just a nice coat of paint. If a property needs too many big ticket fixes, it may not sell in this market, says Ameer.

Experts point to the lack of building as the culprit for the nosebleed prices.

"Demand remains strong, while housing production has lagged for decades," San Rafael, CA-based mortgage broker Richard Redmond tells Realtor.com. "Too many people, not enough homes."

"Even before the devastating fires that destroyed most of the Palisades and Altadena, there was almost no new housing being built in the city," agrees Los Angeles-based real estate investor Jameson Tyler Drew.

How can you keep your payments manageable?

To keep mortgage payments within reason, "it helps to shop around for lower rates, improve your credit score, reduce other debts, and save for a bigger down payment," WalletHub writer and analyst Chip Lupo tells Realtor.com.

He notes that five California cities rank in the top 50 nationally for mortgage delinquency, which shows how overwhelming these high costs have become.

"It's generally best to spend no more than about 28% of your pretax income (or 25% posttax) on mortgage payments," he advises. "If your housing costs would go well above that, renting might be a safer short-term option to avoid financial strain, though rents can be high as well, so careful budgeting is still important."

Others may simply go to cheaper parts of the state. The area of Bakersfield-Delano is the least expensive on the list, coming close to the 30% rule, with 39.6% of income needed to pay a mortgage.