California house hunters can afford only 12% of homes up for sale

"In the state's largest housing markets combined, only 6,341 of 51,803 listings were priced below a combined affordability maximum of $415,600. That's just 12%. The only good news is that this shamefully meager level of affordability is up from 8% at the start of 2025. Cheaper mortgage rates and incomes outpacing home appreciation helped to improve a house hunter's hopes."

"Consider the 44 metros studied outside of the Golden State. Collectively, 38% of homes for sale were affordable - 187,364 of 487,796 listings below the $346,400 affordability max. In January 2025, it was 31%. Or contemplate what house hunters are seeing in the rest of the nation, minus the big 50 metros. In what I'll call 'small town America,' 40% of listings are financially attainable."

"Look at the Golden State housing mess another way: 5% of the nation's listings were in the six big California markets, but the state accounted for only 1% of the homes on the market that met Zillow's affordability standards. The six California metros were among the 10 worst for affordability in the 50 markets studied."

California's housing affordability crisis is severe, with only one in eight homes for sale in the state's six largest metropolitan areas meeting affordability standards based on Zillow's criteria. Using median income data and assuming 30% of income allocated to housing payments, just 6,341 of 51,803 listings in these markets fall below the $415,600 affordability threshold. This 12% affordability rate represents a slight improvement from 8% at the start of 2025, driven by lower mortgage rates and income growth. In contrast, 38% of homes in other major U.S. metros are affordable, and 40% in smaller markets meet affordability standards. California's six largest metros rank among the ten worst for housing affordability nationally.

Read at The Mercury News