In many ways, Los Angeles has a bright future. With plans to bolster public transportation, a drive to end homelessness, and even an Olympic bid to look forward to, LA is emerging once again as city of tomorrow. Unfortunately, there’s one big category where LA continues to lag—home ownership.
According to a new report from the California Association of Realtors, a homebuyer in this county needs a six figure salary at minimum to afford the monthly payments on a median-priced home. That midpoint price right now is $536,720, meaning a potential homebuyer needs to earn a minimum salary of $104,330. Taking into account the average of $2,610 in monthly mortgage costs, including taxes and insurance, the report finds only 26 percent of households countywide have the financial means to buy at that price.
In comparison, the average median price nationwide is $240,900, and the average mortgage payment is $1,170. The minimum salary needed to afford a home at that price is $46,830; 57 percent of U.s. households make at least that much.
Not to pile on, but LA's affordability problem has only been getting more and more dire. As Joel Singer, chief executive at CAR, tells the Daily Breeze, "the dream of owning a home in California is evaporating."
The CAR report showed a 69 percent increase over four years in the minimum income required to buy a home in the LA metropolitan area. In 2012, the minimum annual salary to afford a median priced home was $53,780, a whopping $37,310 less than the current minimum.
- You need to earn $104,000 to afford a house in L.A. County — three-quarters of households do not [Daily Breeze]
- 3 Qtr California Housing Affordability [California Association of Realtors]