Why Is California Housing So Expensive?

Hard. Really hard. Both compared to how difficult it is in other states, and how challenging it was for previous generations of Californians.

In the late 1960s, the average California home cost about three times the average household’s income. Today, it costs more than seven times what the average household makes.

While it’s always been more expensive to be a homeowner in California, the gap with the rest of the country has grown into a chasm. The median California home is priced nearly 2.5 times higher than the median national home, according to 2019 Census data.

The pandemic hasn’t cooled the housing market, either. Demand has long exceeded supply of homes for sale in California, and that’s especially true now. But while many families are suffering the economic impacts of COVID-19, wealthier households with money to spend and capitalizing on low interest rates have driven up prices even more. As of August 2021, California’s median home price hit $827,940 — the fifth all-time record in six months.

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