Housing is Nearly Unaffordable in California

With home prices at 2.5 times higher than the rest of the country, it is becoming increasingly difficult to afford a home in California. According to Los Angeles Daily News, more than half of homeowners are struggling to pay for their homes.

Owning a home in California was once a staple of the American dream. Today, homeownership in the state is at its lowest since World War II. The statistics are grim as close to 70 percent of Californians spend the majority of their paychecks on rent.

Although mortgage interest rates remain relatively low, home prices in California have exploded over the past two years. Additionally, a little over half of California residents own their homes, which is the third worst in the nation. As of 2017, the median home price in California is $507,000, according to statistics provided by the real estate website Zillow.

The cost to rent a home in California ranks among the highest in the U.S. During the Great Recession, rental prices in California remained steady while the rest of the nation saw monthly rental prices fall. As the housing market began improving, California rental prices began to soar. A two-bedroom unit will cost renters $2,400 per month. In San Francisco, a two-bedroom until costs $4,000 a month.

Unfortunately, incomes in the state have not kept pace with rising housing prices and rents. Although the state does pay its workers more on average, those higher wages are not in line with the state's rising cost of living. Statistics show that renters in high-cost areas such as San Jose who earn $100,000 annually can expect to pay 40 percent of their income toward rent.

Higher home prices and skyrocketing rental prices are having a big impact on California's homeless population. Many residents, especially in the greater Los Angeles area, are living on the streets, in their cars or in shelters because they cannot afford adequate housing.


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