Montgomery St. and Skyline of Downtown areas of San Francisco, CA. (Photo: Randy Andy/ Shutterstock)
What it Costs to Buy a House in America: California’s Median Price is $790,000!
How do the most popular states Californians flee to compare?
By Katy Grimes, July 24, 2025 6:05 pm
Most Californians already know that California has the highest median priced houses in the country. It was $825,000 recently, but the California Legislative Analyst’s Office reports that number has dropped slightly – very slightly – to $790,000.
The California Legislative Analyst reports that California real estate prices are so high, “Purchasing A 2-Bedroom Home Now Much More Expensive Than Renting.”
As the LAO explains:
California Home Prices Far Exceed the Rest of the Country. As shown above, California home prices have long been—and continue to be—much more expensive than the rest of the US. Prices for mid-tier homes are more than twice as expensive as the typical mid-tier US home. (Mid-tier homes reflect home values in the 35th to 65th percentile range.) Perhaps even more importantly for a first-time home buyer, a bottom-tier home in California is now about 30 percent more expensive than a mid-tier home in the rest of the U.S.—a gap that has widened over the last decade but narrowed slightly over the past year. (Bottom-tier homes are those with values in the 5th to 35th percentile range.)
The monthly payments on that $790,000 home are $5,948 per month according to the LAO. “Payments for a mid-tier home were over $5,900 a month in June 2025—a 82 percent increase since January 2020. Payments for a bottom-tier home were over $3,600 per month—an 87 percent increase since January 2020.”
VisualCapitalist.com reports that “Unsurprisingly, California has the highest median sale price at $825,000 (as of Dec. 2024), driven by demand in coastal cities and limited new housing supply. Cities like San Jose and San Francisco routinely top the list of least affordable U.S. housing markets. California’s tight zoning laws and chronic undersupply exacerbate this divide.”
They report “States like Ohio ($240,000), Indiana ($260,000), and Mississippi ($266,000) continue to offer the lowest home prices. Many rural or economically stagnant areas see less demand, keeping values lower.”
Alabama is the most affordable state to purchase a home at $220,000.
How do the most popular states Californians flee to compare?
Idaho: $471,000
Nevada: $469,000
Arizona: $435,000
Texas: $352,000
Tennessee: $384,000
Florida: $420,000
North Carolina: $388,000
South Carolina: $330,000
What’s closest or comparable to California home prices?
Hawaii: $760,000
Washington State: $612,000
The Legislative Analyst says that housing costs in California are so high, that:
Purchasing A 2-Bedroom Home Now Much More Expensive Than Renting. “Monthly rents have also grown significantly in recent years, but not as quickly as monthly payments needed to purchase a home. As shown above, monthly payments for a 2-bedroom home are about $2,010 (72 percent) more than renting an apartment or home.”
And:
Costs of Buying A Home Have Grown by More Than Median Income. Affordability depends on both the costs of the housing, as well as the income and/or wages of households. Annual household income needed to qualify for a mortgage on a mid-tier California home in June 2025 was about $237,000—over 2 times the median California household income in 2023 ($96,500). For a bottom-tier home, about $145,000 in annual income is needed to qualify for a mortgage—almost 50 percent higher than median household income in 2023.
And:
Housing Costs Have Grown More Quickly Than Wages. Since January 2020, California housing costs—especially the costs of purchasing a home—have grown more than California wages, as shown above. From January 2020 to June 2025, the growth in monthly payments for a mid-tier home (82 percent) and bottom-tier home (87 percent) have far exceeded growth in average hourly wages (23 percent). Rents have also grown more quickly than wages. Over the same time period, rents grew 38 percent.
It takes a lot of income to be able to make $5,900 monthly house payments – anywhere between $200,000 to $260,000, to afford an $800,000 home, depending on an individual’s financial situation, down payment, credit score, and current market conditions.
The median annual income in California for 2025 is approximately $74,819.
Take a look at the LAO California Housing Affordability Tracker 2025 report here.
and the VisualCapitalist.com report is here. Both are very interesting.
A California native and Navy mom, Katy lives in Sacramento, CA.
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Although housing costs in the Sacramento area are not as high as in the Bay Area, housing prices here are still very high in relation median incomes. In our neighborhood, modest single story family homes built in the 1950’s that mostly have 3 bedrooms and 1 bathrooms are being torn down and being replaced with larger two story homes often with an ADU in the backyard. Just recently a small house from the 1950’s was torn down near us and it was replaced with a new 1,440 sq. ft. home with 3 beds, 2.5 baths, and an 2 car attached garage along with a 2 story ADU in the backyard that contains two units that each have 600 sq. ft. with 2 beds and 1 bathrooms. It was put on the market 4 days ago with an asking price of $950K and it already has a contingent offer.
https://www.zillow.com/homedetails/5461-Bradford-Dr-Sacramento-CA-95820/25815577_zpid/
Wow Samantha,
That ADU is Wiener’s dream come true.
The tear down reconstructed house is okay but that 2 story monstrosity in the back has no business so close to the backyard neighbor.
This is what urban development will do to a sweet neighborhood. IMO ruin the quality of life!
It will also make it more unaffordable to purchase a home because now boy genius developers will buy small hones on a big lot and covert them to a yard full of rental apartments!
So much for affordability and clearly not a solution to the fabricated housing crisis!
Cramming more housing with ADUs puts pressure on neighborhoods that weren’t built to handle it? There’s increased traffic and streets are clogged with more parked vehicles?
That listing has an interesting price history showing it sold for $39K in January 2024 and then it was resold in April 2024 for $96K. Wonder who was able to buy it at a bargain basement price and then was able to clear the lot, build an entire new house along with an ADU, and then get it onto the market in a little over a year? Maybe they have connections?
We have relatives who live in Sacramento and they were planning to add a small addition onto their house of about 250 square feet. An architect/contractor told them that the permits for the addition would probably cost upwards of $25K in addition to sewer and school impact fees and that it might take several months to obtain approval from the City of Sacramento. Building costs would be $150K to $200K. They decided against the addition.
And these idiot commie politicians can’t understand why people are leaving in droves. Commiefornia is so stupid!
We can thank the Communists (Democrats) for SB9 and SB10. ADUs do not help society. They turn more people into renters, and the renters never accumulate any home equity. They end up owning nothing. ADUs increase housing density beyond what it was originally zoned for, and the existing residents suffer. Nobody wins.
People would do well to think beyond living in coastal areas.