The cost of a common household in the Bay Area keeps rising as the income increases.
According to a new study by , Realtor.com, a homebuyer looking to purchase a median-priced residence in the San Jose metro area must make 54 % more than is needed six years ago, an income of$ 370, 000 versus$ 240, 000 in 2019.
That implies that a consumer looking to purchase a standard home now needs to make$ 130, 000 more than they did in 2019. The median listing price at that time increased by 24 % to$ 1.4 million from$ 1.2 million.
A buyer must make$ 263, 000 annually to purchase a home in the San Francisco metro area, which has an average listing price of$ 30.5 %, up from the prior year’s$ 63, 000. The median list price in San Francisco has increased by only 5 % to$ 995, 000.
The highest revenues that can be obtained in both Bay Area areas are at the bottom. ( A 30-year fixed-rate mortgage, 20 % down payment, and no more than 30 % of gross monthly income used to purchase housing are considered necessary. )
The cost of buying a house is rising faster than house prices, in part because mortgage rates are significantly higher today. As of this week, the , average rate on a 30-year fixed-rate mortgage , was 6.81 % — versus 4.2 % in April 2019.
Also a few percentage points ‘ increase in mortgage rates can have a significant impact on a , the lender’s monthly payment.
Take, for instance, a San Jose homeowner who is looking to purchase a median-priced home in 2019 with a 4.2 % interest rate and 20 % of the purchase price of a$ 1.1 million home. Their mortgage payment would be$ 5, 231 in 2019. Even if they paid the same for the house, their mortgage payment would increase to$ 6,703, or 28.1 %, if the interest rate were to be 6.8 %.
It’s not just the Bay Area sometimes. Nationally, the income required to afford the typical home has risen$ 47, 000 to$ 114, 000— a 70 % increase from 2019 to 2025.
According to the Bureau of Labor Statistics, the wage increase has increased by 33 % in the same period.
A income that would allow a person to own a home in the majority of the country qualifies as low-income in the Bay Area. A single person making up to$ 109,700 annually in San Mateo, Marin, or San Francisco counties qualifies as having a low income in accordance with the most recent state eligibility criteria for affordable housing. In Santa Clara County, the limit is$ 111, 700. It costs$ 87 and$ 550 in Alameda and Contra Costa counties.
The area median salary is used to determine enrollment cut-offs. Some of the highest in the country are in the Bay Area.
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