Wondering how much of a raise you’ll need to afford a home in Los Angeles? Well, a new report from HSH does not bring good news. The mortgage data analyzer estimates that buying a home in LA requires an income of nearly six figures.
That makes Los Angeles the third priciest metro area in the nation for homebuyers, behind San Francisco and San Diego. According to the report, a salary of $98,315 is required to buy a median priced home in LA, assuming a 20 percent down payment.
HSH uses figures from the National Association of Realtors that place the median price of an LA home at $503,400, meaning that a 20 percent down payment would be a hair over $100,000. If that seems like a lot to save, the report also includes calculations based on a more manageable 10 percent down payment. Unfortunately, that boosts the required salary up to $115,697, in order to swing the increased monthly payments.
According to the report, those payments would be just shy of $2,300 per month, assuming a 20 percent downpayment. That’s right around 30 percent of a $98,315 salary, meaning that buyers earning a little less could potentially swing a purchase if they felt comfortable spending a little more than recommended on housing (it’s worth noting that most LA renters already do).
Still, it’s certainly alarming that the required salary to comfortably afford a house in LA is nearly twice the county’s median household income of $56,196. No wonder so many Angelenos are resettling in places like Phoenix—where the median home price is $235,600, which requires a salary of 45,914 to buy.