‘Brutal.’ Affording a home in Sacramento is now nearly as hard as buying in San Francisco

Fewer Sacramento County residents can afford to purchase the median-priced home here today than at any point in more than 15 years.

Just 23% of Sacramento residents could afford the typical single-family home in the third quarter of 2023, according to new data from the California Association of Realtors. Sacramento’s drop in affordability from last year was among the steepest in the state and is the worst it’s been since the Great Recession.

“It’s definitely not a shocker to see the affordability index this low,” said Sacramento market analyst and appraiser Ryan Lundquist. “The combination of higher mortgage rates and higher prices has been brutal for many buyers.”

Mortgage rates have hovered close to 7% for several weeks and are higher than they’ve been in decades. At the same time, the median sale price in Sacramento County continues to edge up, reaching $542,000 in the third quarter of 2023, according to CAR’s data.

That means it takes a household salary of $142,000 per year to afford a 20% down payment and the typical monthly mortgage payment of around $3,500. The median household income in Sacramento County is about $84,000, according to the most recent census figures.

Sacramento’s affordability index of 23% is the lowest it’s been since late 2006, Lundquist said. Affordability in the county peaked in 2012, when 74% of households could afford the median-priced home, according to Lundquist’s data, and nearly half the households in Sacramento could still afford the typical home here when the pandemic struck.

Meanwhile, an estimated 21% of families in San Francisco – notoriously one of the nation’s most brutal housing markets – could afford the median-priced home. At more than $1.5 million, it takes a household income of $406,000 to afford the median-priced home in San Francisco.

In Placer County, an estimated 27% of households can afford the median-priced home of $665,000. An estimated 23% of households in both Yolo and El Dorado counties could afford the typical single-family home, according to CAR’s calculations.

Just 15% of California families can afford a home in the Golden State, the lowest statewide affordability figure since 2007, according to CAR. The median sale price of a single-family home in California stands at around $843,000. By comparison, more than one-third of American households can afford the nationwide median-priced home of about $407,000.

Mono County is the toughest market in the state, with just 5% of households making enough money to afford the median-priced home. Fewer than 15% of families can afford a home in a dozen counties, including Los Angeles, San Diego, Monterey and San Luis Obispo.

Lassen is the only county in California where more than half the households can afford the median-priced home.

The affordability crisis appears to be disproportionately hurting younger generations of would-be homebuyers.

A new study from RentCafe found that 25% of millennials in the Sacramento region are still living with their parents or other family members, the eighth-highest percentage in the nation. Five of the top 12 metro areas in terms of mMillennials living at home are in California.

This story was originally published November 16, 2023 at 5:00 AM with the headline "‘Brutal.’ Affording a home in Sacramento is now nearly as hard as buying in San Francisco."