Households need to earn over $260,000 to afford Bay Area home, report says

New data showed a big jump over the past five years in the amount of money a household needs to earn to afford a home in the Bay Area.

The latest figures from Realtor.com show that a household needs to bring in $263,000 per year to afford the median home price in the San Francisco and Oakland markets. In the South Bay, a household needs to have an income of $370,000, which is 54% higher than what was needed in 2019.

“I’m a teacher, so I’m barely breaking over 100k. I will never reach that maximum,” said Dana Pollock of San Jose.

The figures also showed that the median home price in the South Bay is $1.4 million and includes a 20% down payment of about $300,000.

At today’s rates, the monthly mortgage payment would set a household back more than $8,000 per month.

“We do have some buyers that have been in the market and have made some equity coming in with money, but for the first-time buyer, it’s really, really tough,” said Tammie Peters, president of the Silicon Valley Association of Realtors.

Peters said her calculations show the median home price in the South Bay is closer to $1.8 million and that down payments she sees are from people cashing in company stock.

“I’ve had listings recently,y and all of the buyers have come in with very large down payments. I just sold one for $2.4 million, and they had an over 50-percent down payment,” she said.

Realtors met with legislators urging them to make it easier for developers to get home-building permits so more homes can be built.

Peters said the hope is that more inventory would lead to lower prices.

“It’s impossible unless you have another partner or a spouse who is making well beyond what I’m making,” Pollock said. “Considering having a family, that’s out of the question, right? All of those pieces add up together, it feels like a broken dream.”

Source: NBC Bay Area