Aspiring homeowners in California face a tougher road to homeownership compared to the rest of the country, as per a recent study conducted by WalletHub, a personal finance platform.
WalletHub analyzed 300 U.S. cities based on affordability, real estate market value, and quality of life, revealing that eight out of the ten worst cities for first-time homebuyers are in California.
At the bottom of the list is Berkeley, ranking 300th overall, with low scores in affordability (297th), real estate market value (263rd), and quality of life (281st). Santa Monica follows, being the least affordable while ranking 276th in real estate market and 188th in quality of life.
Other cities in California that made the list include Anchorage (298th), Santa Barbara (297th), Oakland (296th), San Francisco (295th), Los Angeles (294th), Glendale (293rd), and Costa Mesa (292nd). New York City also made it to the list as the tenth-worst city for first-time buyers (291st).
Buying a home, especially for first-timers, remains challenging due to high mortgage rates and soaring home prices, particularly in the expensive California housing market. In June, the median home price in California stood at $858,600, up 7.8% from the previous year, while the national median price was $442,525, nearly half of California’s price, but still up 4% year-over-year.
Berkeley, known for its prestigious universities, boasts even higher home prices, with a median of $1,530,000 in June, a 7.4% increase from the previous year. Santa Monica, a popular beach town, tops Berkeley with a median price of $1,672,000, up 4.2% annually.
A recent Harvard University study revealed that owning a home in California, especially in cities like San Jose, Sunnyvale, Santa Clara, and Los Angeles, became increasingly unachievable in 2023. Median home prices were up to 11 times higher than the average annual wage of around $113,000, surpassing income growth and leaving first-time buyers struggling to save for a home.