Hey, Los Angeles County, did you get a 22% raise in the last three years?<\/p>\n
Well, that\u2019s how much the required household income to buy a house has surged \u2014 up $40,000 to $226,000, according to my trusty spreadsheet\u2019s comparison of the California Association of Realtors\u2019 affordability report for the second quarter of 2025<\/a> vs. the numbers from the same period in 2022<\/a>.<\/p>\n That income gets L.A. house hunters the $879,900 median-priced single-family home, assuming 2025\u2019s 6.9% interest rate compared to 5.4% three years earlier, along with the estimated costs for property taxes and insurance.<\/p>\n The estimated payment equals 30% of household incomes. And the calculation also includes a 20% down payment.<\/p>\n Consequently, you\u2019d also need $175,980 in cash to close a sale, too.<\/p>\n It\u2019s just another example of how unaffordable local housing has become. Consider these expanding expenses, then ponder 15% wage growth across Southern California in the same timeframe, as reported by one federal pay index<\/a>.<\/p>\n More for mortgages<\/p>\n Those pricier home loans are not simply due to the end of the Federal Reserve\u2019s cheap money policy<\/a> in early 2022.<\/p>\n The Fed also stopped buying mortgage bonds three years ago to keep rates low. The central bank had almost doubled its mortgage-bond holdings to $2.7 trillion during the pandemic\u2019s economic turmoil to support the housing market.<\/p>\n What\u2019s also boosting a buyer\u2019s financial requirements is that L.A. house prices rose $54,250 since 2022\u2019s second quarter \u2013 a 7% gain.<\/p>\n All this change adds up to a typical L.A. buyer\u2019s monthly house payment growing by $1,000 \u2013 that\u2019s a 22% jump \u2013 to $5,650.<\/p>\n Small fock<\/p>\n Who makes this kind of cash in L.A.?<\/p>\n Well, Realtors estimated just 13% of L.A. households countywide could buy in the second quarter vs. 16% three years earlier.<\/p>\n That small flock of qualified buyers is a key reason why local homebuying runs well below historic norms<\/a>, according to sales data from Attom.<\/p>\n