The cost of homes in the United States has increased significantly in the past few years. The median price of homes for sale increased by almost 50% from the second quarter of 2020 to the third quarter of 2022 due to increased demand and limited supply caused by the pandemic. The sale price of a typical American home has decreased in recent months, but housing prices are still very high compared to historical levels.
Home values have increased significantly, and the costs of borrowing for home buyers have also gone up. The average interest rate on a 30-year fixed mortgage has been above 6% since September 2022. This is the highest rate we have seen in almost 15 years. Many Americans cannot afford to buy a home because prices and mortgage rates are very high in the market.
However, housing prices can be influenced by various factors that are separate from overall national market trends, and one of these factors is location. The price of two nearly identical homes can differ by hundreds of thousands of dollars, depending on their location. For people who want to buy a home and have a limited budget, there are certain cities in California that are more affordable than others.
Based on data from the U.S. Census Bureau’s 2022 American Community Survey, the average value of a home in California is $659,300. However, in the 50 cities and towns in the state with populations of at least 125,000, the median home values vary from around $300,000 to almost $1.7 million.
Home prices in local markets are usually based on what residents can afford. In California, there are several affordable cities for homebuyers that are not considered high-income areas. Out of the 50 cities in California that have data from the ACS, 26 of them have a median home value that is lower than the median value for the entire state. In almost all of these places, the average household earns less than the median household income of $91,905 for the entire state. Most of the expensive housing markets in California have residents with higher incomes.
The cheapest and most expensive housing markets in California
Sunnyvale
- Median home value: $1,680,700
- Homes worth over $1 million: 78.2%
- Homeownership rate: 44.4%
- Median household income: $174,506
- Total population: 154,573
Santa Clara
- Median home value: $1,440,200
- Homes worth over $1 million: 82.2%
- Homeownership rate: 41.9%
- Median household income: $165,352
- Total population: 128,058
Fremont
- Median home value: $1,231,500
- Homes worth over $1 million: 74.5%
- Homeownership rate: 60.7%
- Median household income: $169,023
- Total population: 228,795
Also read: Exploring the Cheapest and Most Expensive Housing Markets in Virginia
Irvine
- Median home value: $1,025,700
- Homes worth over $1 million: 52.1%
- Homeownership rate: 43.9%
- Median household income: $122,948
- Total population: 304,527
Glendale
- Median home value: $992,000
- Homes worth over $1 million: 49.3%
- Homeownership rate: 34.2%
- Median household income: $81,219
- Total population: 194,512
Huntington Beach
- Median home value: $976,800
- Homes worth over $1 million: 47.4%
- Homeownership rate: 55.7%
- Median household income: $114,747
- Total population: 197,481
Thousand Oaks
- Median home value: $900,600
- Homes worth over $1 million: 35.3%
- Homeownership rate: 69.2%
- Median household income: $125,399
- Total population: 126,532
Orange
- Median home value: $848,200
- Homes worth over $1 million: 24.5%
- Homeownership rate: 58.9%
- Median household income: $109,335
- Total population: 138,728
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