Buying An LA Area Home In 2020, Here's What You Need To Earn

LOS ANGELES, CA — Looking to buy in a booming real estate market? According to the California Association of Realtors, high home prices and low earnings across the state dampened the second-quarter real estate figures for the state of California.

In the Los Angeles metro area, the median price of for-sale homes reached $581,000 in the second quarter. That figure is up from 31% in the first quarter and 29% in the second quarter of 2019. Only 32% of Southern Californians could afford to purchase a home at that median price.

Buying in Orange County was a little grimmer, with a median-priced home at $859,000 and a mere 25% of residents able to afford to purchase during the second quarter. That figure was up from 24% in both the first quarter of 2020 and the second quarter of 2019.

Statewide, 33% percent of households could afford to purchase the $610,850 median-priced home in the second quarter, down from 35% in the first- quarter but up from 30% a year ago.

How much do you need to earn, annually, to purchase a home in California?

According to CAR, homeowners must earn a minimum annual income of $115,200 to make monthly payments of $2,880, including principal, interest, and taxes on a 30-year fixed-rate mortgage at a 3.43 percent interest rate.

Forty-four percent of home buyers statewide were able to purchase the $480,000 median-priced condo or townhome. An annual income of $90,400 was required to make a monthly payment of $2,260.
Housing affordability for condominiums and townhomes was unchanged from first-quarter 2020, with 44% of California households earning the minimum income to qualify.

Elsewhere, across the U.S., median-priced homes sit at under $300,000 a year.

Compared with California, more than half of the nation's households (57%) could afford to purchase a $291,300 median-priced home, which required a minimum annual income of $54,800 to make monthly payments of $1,370, the report said.
The complete report can be found at www.car.org.