URGENT UPDATE: Only 15% of Californians can afford to purchase a home, according to the latest report from the California Association of Realtors. This alarming figure, released in the second quarter of 2025, highlights a steep decline in housing affordability that poses a significant crisis for residents across the state.
As home prices soar, the required income to buy a median home in California—currently at $905,680—has jumped to $232,400, marking a staggering increase of $33,200 or 17% since 2022. This means that only a fraction of households can qualify for a mortgage, a dire situation considering that just 16% were able to afford homes two years ago.
The crisis is not confined to California; the national picture is equally concerning. The median home price in the U.S. stands at $429,400, requiring a household income of $110,400. This reflects an increase of $17,200 or 18% since 2022, leading to just 34% of Americans being able to afford homes today, down from 38% three years prior.
The alarming trends are driven by rising mortgage rates, which are currently at 6.9%, compared to 5.4% in 2022. Homebuyers are now faced with increased monthly payments, requiring them to allocate 30% of their income to housing costs. Additionally, a 20% down payment for California homes amounts to a staggering $181,000, while the national average requires $86,000.
This affordability crisis is exacerbated by rising home sale prices, which have increased 3% statewide in California and 4% nationally since 2022. The situation is particularly severe in regions like the Bay Area, where the median home price has soared to $1.4 million, necessitating a mind-boggling income of $359,200—up $22,000 or 7% over the last three years.
In Southern California, the median home price is $850,000. Here, the qualifying income has surged to $218,400, reflecting an increase of $38,000 or 21% since 2022. Currently, only 14% of Southern California households can afford to buy a home, a drop from 17% just two years ago.
In light of these developments, state officials and housing advocates are raising alarms about the long-term implications for residents and the economy. With affordability diminishing, many families face the prospect of being priced out of their communities, leading to potential socioeconomic divides.
Moving forward, stakeholders in California’s housing market will need to address these critical issues urgently. The housing affordability crisis shows no signs of abating, and immediate action is required to support families struggling to make ends meet in the face of these rising costs.
This developing story will continue to unfold, and residents are urged to stay informed on any new measures or interventions proposed by local authorities.
For further updates, stay tuned as we track the evolving situation in California’s housing market.
