Buying a home in California became even harder across all ethnic groups last year, as surging mortgage costs pushed affordability further out of reach, according to the California Association of Realtors (C.A.R.).
Only 18% of Californians earned enough to purchase the state’s median-priced detached home, priced at $865,440 in 2024. That figure slipped from 19% the year before. Among ethnic groups, the disparities were even starker: 21% of White households could afford a median-priced home, compared to just 10% of Black households and 9% of Hispanic/Latino households. Meanwhile, 27% of Asian households had the income needed to buy.
“Buying a home in California became less affordable for all ethnic groups last year, as interest rates remained elevated and the typical monthly mortgage payment for a median-priced detached home rose 6 percent compared to the previous year,” C.A.R. said.
To afford a median-priced home in 2024, a minimum annual income of $221,200 was required — enough to cover a $5,530 monthly payment assuming a 20% down payment and a 30-year fixed-rate mortgage at 6.84% interest. In contrast, the 2024 median incomes for California households varied significantly: $111,680 for Whites, $128,720 for Asians, $82,660 for Hispanics/Latinos, and $70,220 for Black households.
Homeownership Gaps Persist, Despite Slight Narrowing
Affordability gaps between ethnic groups and the overall population narrowed slightly last year, but remained substantial. The gap between Black households and the general California population shrank from 8.9 percentage points to 8.0 percentage points. For Hispanic/Latino households, the gap improved from 9.4 points to 8.3 points. However, C.A.R. cautioned that, “While interest rates are projected to dip slightly in 2025, the gap in housing affordability among ethnic groups will likely remain wide this year as home prices are expected to grow moderately in the next 12 months.”
According to the Census Bureau’s American Community Survey, homeownership rates also reflect persistent inequality: 64.4% for White households and 61.5% for Asians, compared to 45.9% for Hispanics/Latinos and just 36.6% for Black households.
At the national level, affordability showed similar gaps: 54% of Asian households and 41% of White households could afford the U.S. median-priced home, while only 32% of Hispanic/Latino and 24% of Black households could do the same.
Regional Challenges
Some parts of California stand out for even wider disparities. In Contra Costa County, for example, the affordability gap for Black households was -14% compared to the overall population. Gaps were also steep in Kern County (-13.4%) and San Francisco (-13.1%). Hispanic/Latino affordability gaps were largest in Santa Clara (-10.3%) and Contra Costa (-10.2%).
San Mateo County emerged as the least affordable for both Black and Hispanic/Latino households, where only 5% and 8%, respectively, could afford a median-priced home. Meanwhile, Fresno and San Joaquin counties were among the few bright spots, where up to 34% of Black households could afford to buy.
For Asian households, Orange County proved the toughest market, with just 14% earning enough to buy a median-priced home. Fresno and Kern counties offered significantly more affordability, with 43% and 59%of Asian households qualifying, respectively.
White households also faced challenges, especially in Orange County where only 15% could afford the median-priced home, compared to 43% affordability in Fresno.
Efforts to Close the Gap
C.A.R. noted its ongoing efforts to improve housing access for underserved communities. “Since its inception in 2022, C.A.R.'s Housing Affordability Fund's Pathway to Home Closing Cost Assistance grant program has provided closing cost grants totaling $3 million for 312 first-time home buyer households from an underserved community throughout California,” the organization said. It aims to expand that number to 415 households and $4 million in grants by the end of 2025.
