Housing Affordability Crisis in Southern California: Median House Prices Soaring
The housing market in Southern California is reaching unprecedented levels of unaffordability, with the median house price jumping 45% since early 2020 and a staggering 183% since 2010, according to state Realtor data. A new housing report reveals that buying a home in Los Angeles and Orange counties now costs 10 times more than what a typical family earns in a year, double the ratio from 1980.
The L.A.-Orange County metro area has the fourth-highest price-income ratio out of 385 U.S. metro areas, with home prices now ten times the median household income. In the Inland Empire, home prices are more than six times greater than median income, ranking 37th highest in the nation. San Diego County’s median home price is almost nine times greater than median income, ranking 11th highest.
The Harvard Joint Center for Housing Studies’ annual report highlights the nationwide trend of rising home prices outpacing household incomes, with U.S. home prices now five times the nation’s median household income. The report also notes that housing in America has become increasingly unaffordable for both homeowners and renters, with millions priced out of the market by elevated prices and interest rates.
In Southern California, more than 56% of renters are considered “cost burdened,” spending over 30% of their income on rent, while almost a third spend at least half of their income on rent. The report also reveals the staggering minimum income required for homeownership in the region, with Orange County homebuyers needing to earn over $420,000 a year to afford payments for a median-priced home.
Despite high mortgage rates and low affordability, home prices are expected to continue rising, with real estate data firm CoreLogic predicting a 5.7% increase in U.S. home prices this year. The study concludes that housing supply and affordability remain major challenges, contributing to rising homelessness as the number of households in need of assistance continues to grow.