Dream of owning a luxury home in California? Here’s how much you need to earn to afford one
Finding cheap housing in California can be challenging. What if you want to buy a luxury home?
You’d need to earn more than $300,000 a year in order to afford a high-end home in California, according to a recent study by custom cabinetry manufacturer Highland Cabinetry.
“Rising home prices and growing income disparities are creating significant challenges in the luxury housing market,” Highland Cabinetry said in a Jan. 31 news release. “Buyers need to consider not just the upfront cost of a home but also ongoing expenses like taxes and maintenance, which can add up quickly.”
To make owning a luxury home a “more realistic goal,” the company suggested exploring strategies such as co-ownership or larger down payments.
Here’s what you need to know about buying a luxury home in California:
How much income do you need for California luxury home?
The median price of a luxury home in California is $1,452,034, the highest in the country, according to the Highland Cabinetry study.
That means California residents would need to earn an annual income of $324,160 to be in the position to buy a high-end home, the study said.
To buy your dream home, you will need earn roughly six times the state’s average annual income of $54,030.
You’d need to make a monthly mortgage payment of $9,964 after a $290,407 down payment.
Statewide, there are 11,139 luxury homes on the market, according to the study.
California has the fifth-highest number of luxury homes in the United States, just behind Georgia, Florida, New York and Texas.
What was most expensive home sold in California?
The most expensive home sale in state history was a 15,000-square-foot Malibu mansion purchased by musical power couple Beyonce and Jay-Z for $210 million in 2023, the Los Angeles Times reported.
The priciest home sale in 2024 involved a five-bedroom, 10-bathroom home near Santa Barbara that sold for $96 million, according to Forbes.
What is priciest California home on the market now?
As of Feb. 7, the priciest mansion for sale in California was a 50,000-square-foot home in Beverly Hills, on the market for $195 million.
The six-acre property boasts 16 bedrooms, 27 bathrooms, a tennis court, a bowling alley and a private movie theater, according to a Zillow listing.
The home was put up for sale in October following the divorce of Hyatt hotel heir Tony Pritzker and his wife, Jeanne, in 2022, Business Insider reported.
What are most expensive US states for luxury homebuyers?
These were the 10 most expensive states in the United States for homebuyers looking to purchase high-end properties, based on the median prices for luxury homes:
- California: $1.45 million median luxury home price
- Hawaii: $1.36 million
- Washington: $1.1 million
- Massachusetts: $1.03 million
- New York: $885,815
- Colorado: $877,387
- New Jersey: $857,039
- Montana: $773,927
- Utah: $767,216
- Oregon: $738,156
How did Highland Cabinetry define a luxury home?
Highland Cabinetry defines luxury homes based on factors such as size, high-end construction materials, and desirable amenities.
The company said its analysis utilized data on average annual income, median income and home prices in each state, considering typical mortgage rates and down payment requirements to calculate the necessary income for luxury homeownership.
This story was originally published February 11, 2025 at 5:00 AM with the headline "Dream of owning a luxury home in California? Here’s how much you need to earn to afford one."