Report Claims that you need to make $100,000 a year to Afford the Average home in L.A. County
A report released in August from the California Association of Realtors (CAR) shows that 29 percent of Los Angeles. County households could afford to buy the county’s median-priced home of $485,800 during the first quarter of 2017. Additional CAR figures show that a minimum annual income of $99,830 was needed to make monthly payments of $2,500, including principal, interest and taxes, on a 30-year fixed-rate mortgage at a 4.36 percent interest rate. In comparison, 52 percent of San Bernardino County households could afford that region’s $256,900 median-priced home during the first quarter of 2017, which is down from 54 percent the previous quarter and 57 percent during the first three months of 2016. The minimum annual income needed there to meet the monthly $1,320 mortgage payment was $52,790, a little more than half the earnings needed for Los Angeles County. CAR Senior Economist Jordan Levine stated,
The core job center markets in L.A. and Orange County continue to see price growth, so the kind of income you need to live in those areas keeps going up. On the flip side, you have the San Bernardino County story. That’s why the market is so attractive out there. When people see what home prices are, all of the sudden that hour-long or hour-and-a-half commute doesn’t seem so bad anymore.
Orange County’s situation is far worse with the median-priced home there was $750,000 during the first quarter of 2017 and only 21 percent of households could afford it, half the level seen in San Bernardino County. That was down from 22 percent in the fourth quarter of last year and 23 percent a year earlier. An Orange County household would need to earn at least $154,120 a year to make the monthly payment of $3,850. Los Angeles County’s affordability challenges are reflected in new income limits issued from the U.S. Department of Housing and Urban Development. Under HUD’s latest guidelines, a person living in Los Angeles County who earns $50,500 a year would qualify for low-income housing. There are definitely several challenges for California’s in trying to secure an affordable home and hopefully something is done to remedy the issues.