San Diego, California – The dream of owning a home in San Diego seems to be slipping further away as housing costs surge to previously unseen levels. A recent report from Zillow reveals that San Diego families now need an annual income of close to $275,000 to afford a mortgage, nearly double the pre-pandemic figure. This estimate suggests that only 18% of households in San Diego County, where the median household income is $96,964, have sufficient earnings to comfortably purchase a home, according to the latest U.S. Census Bureau data from 2022.
The study defines “affordable” as spending no more than 30% of income on housing after making a 10% down payment. It illustrates how housing costs are outpacing wage increases, making homeownership an increasingly unattainable goal for many. In San Diego, the average monthly mortgage payment, inclusive of insurance, property taxes, and maintenance after a 10% down payment, is $5,757, necessitating an income of at least $273,613 to afford, as per Zillow’s analysis.
Notably, it would take a San Diegan nearly 17 years to save for a 10% down payment, assuming a 5% monthly saving rate. This significantly surpasses the national average of 8.4 years required to save for a down payment, with an annual average income needed to afford a home set at $106,536. Among the 50 largest metropolitan areas ranked by Zillow, San Diego commands the fourth-highest income requirement for homeownership, trailing behind only San Jose, San Francisco, and Los Angeles.
Despite the stark financial hurdles, potential homebuyers are exploring innovative routes to achieve their homeownership goals. Zillow notes a rising trend of individuals leaning on family assistance, opting to “co-buy” homes, or purchasing properties with the intention of renting out a portion for supplemental income. Another plausible strategy for San Diegans seeking affordable housing is to consider relocating to areas where the cost of homeownership is more feasible.
As housing prices continue to soar, the median price of a single-family home spiked to $1.043 million last month, a notable jump from $899,000 the previous year, signifying a 16% increase. Similarly, condos and townhomes in San Diego saw a surge in prices, with the median price climbing to $662,000 compared to $618,500 in the previous year. Notably, the priciest home sold in San Diego County in February 2024 was a luxurious Spanish-style beachfront property in Coronado, fetching a staggering $28 million.
The widening gap between income levels and housing costs in San Diego highlights the growing challenge for families aspiring to own a home in this desirable region. As residents grapple with the exorbitant costs of homeownership, solutions such as creative financing, strategic partnerships, and potential relocation may offer a glimmer of hope in the pursuit of the American dream in San Diego.