Shrinking affordability isn’t just a California problem.

That’s what you see from my trusty spreadsheet’s comparison of the California Association of Realtors’ affordability report for the second quarter of 2025 vs. the numbers from the same period in 2022.

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Yes, the required income to buy California’s $905,680 median home was $232,400 this spring — up $33,200 or 17% in three years. That translates to just 15% of households statewide being able to afford to buy vs. 16% in 2022.

But ponder affordability, nationally, too.

Buying the $429,400 U.S. median home required $110,400 in income, a cash flow that grew $17,200 or 18% since 2022.

So, 34% of Americans qualify compared to 38% three years ago.

Mortgage math

This math assumes a theoretical buyer borrowed at 2025’s 6.9% interest rate compared to 5.4% three years earlier, along with the estimated costs for property taxes and insurance.

Affordability is pegged to a buyer spending 30% of their household income on these house payments. And the calculation also includes a 20% down payment.

Consequently, the theoretical California house hunter also needs $181,000 in cash to close a sale. Nationally, a 20% down payment costs $86,000.

Those pricier home loans are not simply due to the end of the Federal Reserve’s cheap money policy in early 2022.

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’s economic turmoil to support the housing market.

And it doesn’t help house hunters that sale prices rose. Statewide, up by 3% in three years and 4% nationwide.

Split state

Affordability is by no means uniform across California.

Buying the Bay Area’s $1.4 million median home required $359,200 in income this spring — up $22,000 or 7% in three years. And don’t forget the $280,000 down payment.

Thanks to a 6% dip in Bay Area prices since 2022, 20% Bay Area households can now afford to buy. That’s up from 18% in 2022.

Compare that to a Southern Californian trying to buy the region’s $850,000 median home — up 6% in three years.

The qualifying income was $218,400 — up $38,000 or 21% in three years. Plus, there’s the $170,000 down payment needed.

As a result, the math says only 14% of Southern California households could afford to buy this spring vs. 17% in 2022.

Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at [email protected]