The salary needed to afford a typical home in the Bay Area just keeps climbing higher.
A homebuyer hoping to afford a median-priced home in the San Jose metro region must earn 54% more than was needed six years ago — an income of $370,000, versus $240,000 in 2019, according to a new study by Realtor.com.
That means that a buyer hoping to afford a typical home today needs to earn $130,000 more than they did in 2019. The median listing price in that time has jumped 24% to $1.4 million from $1.13 million.
In the San Francisco metro area, which includes Oakland and Fremont, a buyer must earn $263,000 a year to afford a home at the median listing price— up 30.5% from five years ago. The median listing price in San Francisco has increased just 5% to $995,000.
Both Bay Area markets top the list of the highest incomes required to afford a home. (Income needed is calculated assuming a 30-year fixed-rate mortgage, a 20% down payment, and no more than 30% of gross monthly income spent on housing.)
The income needed to afford a home is growing faster than home prices in part because mortgage rates are much higher now. As of this week, the average rate on a 30-year fixed-rate mortgage was 6.81% — versus 4.2% in April 2019.
Even just a few percentage points’ increase in mortgage rates can have a huge impact on a buyer’s monthly payment.
Take, for example, a buyer of a median-priced home in San Jose in 2019 with a 4.2% interest rate and a 20% down payment on a $1.1 million home. Their monthly mortgage payment would be $5,231 in 2019. With a 6.8% interest rate, even if they pay the same price for the house, their mortgage payment would increase to $6,703 — a 28.1% difference.
It’s not just the Bay Area, either. Nationally, the income required to afford the typical home has risen $47,000 to $114,000 — a 70% increase from 2019 to 2025.
In that same time, wages have increased 33%, according to the Bureau of Labor Statistics.
A salary that would make someone a homeowner in much of the country qualifies as low-income in the Bay Area. According to the latest state eligibility standards for affordable housing, a single person making up to $109,700 a year in San Mateo, Marin or San Francisco counties qualifies as having a low income. In Santa Clara County, the limit is $111,700. In Alameda and Contra Costa counties, it’s $87,550.
Those eligibility cut-offs are determined by the area median income. The Bay Area has some of the nation’s highest.