If you want to qualify for a single-family home at the median cost in Los Angeles County, your annual income will have to ring in around $127,000, a new report from the California Association of Realtors found.
Orange County buyers have an even higher minimum income to meet, at a jarring $162,000.
The California Association of Realtors however, sees the numbers as a positive: more Californians are making more money, and the cost of borrowing is lower than before.
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First-time buyers in LA may bristle at the thought that even after coming up with a 20% down payment -- which is $122,694 -- the monthly mortgage would still be about $3,000, according to the 3rd Quarter housing affordability report released Nov. 7.
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The report based the Los Angeles County estimate on a median-priced home, which comes in at $613,470.
The estimated monthly payment of $3,010 includes principal, interest and taxes "on a 30-year fixed-rate mortgage at a 3.85 percent interest rate."
An interest rate of 3.85% is traditionally pretty low. The rate was at 4.77 percent a year ago.
"The percentage of home buyers who could afford to purchase a median-priced, existing single-family home in California in third-quarter 2019 edged up to 31 percent from 30 percent in the second quarter of 2019 and up from 27 percent in the third quarter a year ago," the C.A.R.'s Traditional Housing Affordability Index found.
The prices and salary necessary to make payments is all the more shocking when taking into account the median income of a family in Los Angeles: just over $69,000 a year.
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Across the United States, the average income needed to afford a home came in at $54,800.
Even when looking at the numbers, Burbank Realtor Karol Kochova said buyers should resist the urge to panic.
"Don't let that number scare you. Because when it comes to obtaining financing, there's different programs," she said. "Consult with the mortgage broker. See where you stand. They'll be able to guide you on your buying power."
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Kochova said the banks are motivated right now to get buyers into homes, especially since inventory is slowly creeping up and interest rates are staying low.
She says you can still afford a house if you make less than $127,000 if you have other financial ducks in a row.
Those with fewer debts are in better shape, she said. Also, if a buyer has a co-signer, like a parent, they may have an advantage.
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If a buyer still doesn't qualify, there are housing options in other counties in Southern California.
Another option? Condos or townhomes.
The minimum income necessary to purchase a condo or townhome, according the report, is $91,200 for a $465,000 median-priced condo or townhome with monthly payments of $2,280.
San Bernardino County was listed as the most affordable in Southern California in the report. See the report here.
Gordon Tokumatsu contributed to this report.