These are the worst cities in California for renters looking for a first home
LOS ANGELES – California is an expensive place – we know that.
That being said, inflation and the current state of the economy aren’t helping either, driving up the cost of land and building materials more than ever.
This isn’t the best news for people looking to buy a first home.
It’s so bad, especially in the world of real estate, where after the last mortgage rate hike, renters in 46 of the 50 largest US cities can no longer afford a first home, according to a recent study by Point2Home.
The real estate website analyzed data on the median price of a primary home and the median income of renter households to estimate the impact of the latest rate increases on affordability.
They discovered that renters’ dreams of home ownership do not match the reality of nearly all major US real estate markets.
In California, renters in Los Angeles, Long Beach, San Jose and Oakland top the list of worst places to start a first home.
In these cities, workers earn less than 40% of the income needed to cover the monthly mortgage rate for a first home.
Renters in Los Angeles earn nearly $50,000 on average, the data shows, while the income required to pay a mortgage is nearly $167,000. That means they’re $117,369 short of what’s needed to buy an entry-level home.
It’s also a little better in Long Beach and Oakland, where workers earn more than $50,000 on average. The income required in these two cities to pay a mortgage is between $140,000 and $150,000, which means that potential buyers in these cities are earning $90,000 less than they need to afford a home. first house.
The study also found that San Francisco costs more than all of the median entry-level homes in the 10 most affordable cities combined. Here, the average renter household earned $100,715, but the amount a first-time buyer would need to comfortably cover mortgage payments was $251,190. That means renters in San Francisco are missing $150,475 (or 60%) to realize their dreams of home ownership.
Nationally, the study found that renters in just four major US cities earned 100% or more than they needed to afford an entry-level home. These cities are Detroit, Michigan; Tulsa, Oklahoma; Memphis, TN; and Oklahoma City, Oklahoma.
To view the full study, tap or click here.