California's Housing Crunch: In Major Metros, Mortgages Now Devour Over Half of Paychecks

The golden dream of California homeownership is dimming for many as mortgage payments now consume a staggering portion of household incomes, according to a recent Realtor.com^® report. The state ranks as the nation's third least affordable housing market, with the median household needing to dedicate nearly half its income to afford a median-priced home.

The long-standing financial rule of thumb—spending no more than 30% of income on housing—has been rendered obsolete across California's major metropolitan areas. "In none of the state’s major metros is the median home affordable to the median-earning household by the 30% rule," the report states, highlighting a systemic shift in the market's dynamics.

Statewide, the median household income of $95,065 is pitted against a median home price of $697,000, requiring 48.8% of income for mortgage payments. This places California behind only Montana and Hawaii in unaffordability, surpassing high-cost states like New York and Massachusetts.

The strain is most acute in urban centers. Los Angeles tops the list, where a typical household would need to allocate a crushing 72.4% of its income to mortgage payments for a median-priced home nearing $1 million. The top ten list of metros where housing costs bite the largest share of income includes San Diego (58%), Oxnard (55.3%), San Jose (53.7%), Riverside (44.9%), San Francisco (43.8%), Stockton (42.5%), Sacramento (42.4%), Fresno (41.4%), and Bakersfield (39.6%).

"The large metro areas of California have always been challenging for buyers," said Cara Ameer, a Coldwell Banker agent licensed in California and Florida. "Most incomes have made it very difficult to afford a single-family home, and that was before the recent spikes in interest rates and insurance." This financial squeeze is pushing a generation toward permanent renting, she notes, as renting often remains more manageable than bearing the full burden of maintenance, taxes, and HOA fees.

Experts point to a chronic imbalance between supply and demand as the root cause. "Demand remains strong, while housing production has lagged for decades. Too many people, not enough homes," explained Richard Redmond, a mortgage broker based in San Rafael. Jameson Tyler Drew, a Los Angeles-based real estate investor, concurred, noting that even before recent wildfires, new housing construction in many areas was virtually stagnant.

For those determined to buy, financial analyst Chip Lupo advises shopping for lower rates, improving credit scores, and saving for a larger down payment. However, he warns that the strain is evident, with five California cities ranking in the top 50 nationally for mortgage delinquency. "If your housing costs would go well above 28% of your pretax income, renting might be a safer short-term option to avoid financial strain," Lupo suggested.

The data underscores a bifurcated market: while coastal and urban hubs demand immense financial sacrifice, some inland areas like Bakersfield offer relative relief, though still above traditional affordability guidelines.

Voices from the Ground

Michael Torres, 34, Teacher, San Diego: "We've given up on buying anywhere near the city. My wife and I are now looking at moving to Nevada. It's not just the mortgage; it's the feeling that you're working just to keep a roof over your head, with nothing left for life itself."

Priya Chen, 41, Tech Manager, San Jose: "The market is brutal, but high salaries in some sectors still make it possible. It's about priorities and long-term investment. Yes, I'm spending over 50% of my income on my mortgage, but I see it as building equity in the most resilient market in the country."

David Miller, 58, Small Business Owner, Los Angeles (Sharply Critical): "It's an absolute failure of policy and greed. Decades of NIMBYism, bureaucratic red tape, and developers catering only to the luxury market have created this monster. Young families are being bled dry to enrich landlords and speculators. This isn't a market; it's a crisis engineered by poor leadership."

Rebecca Hayes, 29, Nurse, Sacramento: "We managed to buy a small condo last year, but it meant taking on a huge financial risk and getting help from family. I worry constantly about interest rate changes. The 'California Dream' feels like it has a very high monthly payment attached to it now."