San Mateo becomes only county in California where you need to earn more than $500K annually to afford a median-priced home

You really have to be rich to live in Mateo!

“$518,400 – that’s how much you need to earn annually to afford a median-priced home in San Mateo County. In neighboring Santa Clara County, you need $468,000. 

Higher borrowing costs and a shortage of available homes for sale have brought California housing affordability to the lowest level in 16 years, with San Mateo and Santa Clara counties requiring the highest minimum incomes in the state for a median-priced home, according to a recent Traditional Housing Affordability Index report from the California Association of Realtors. 

Not only is California a war zone—it is an expensive war zone.  Any wonder Texas and Tennessee are growing so much?  Unless you already own a home or was an original investor in Apple, California is not the place to live.

San Mateo becomes only county in California where you need to earn more than $500K annually to afford a median-priced home

by Silicon Valley Association of Realtors, Palo Alto Online,  2/15/24  https://www.paloaltoonline.com/real-estate/2024/02/15/san-mateo-just-became-the-only-county-in-california-where-you-need-to-earn-more-than-500k-annually-to-afford-a-median-priced-home/ 

$518,400 – that’s how much you need to earn annually to afford a median-priced home in San Mateo County. In neighboring Santa Clara County, you need $468,000. 

Higher borrowing costs and a shortage of available homes for sale have brought California housing affordability to the lowest level in 16 years, with San Mateo and Santa Clara counties requiring the highest minimum incomes in the state for a median-priced home, according to a recent Traditional Housing Affordability Index report from the California Association of Realtors. 

Statewide 

According to the report, which analyzed housing data in the fourth quarter of 2023, only 15% of homebuyers could afford to purchase the statewide median-priced single-family home of $833,170. That’s down from 17% a year ago. To afford the statewide median, buyers need to earn a minimum annual income of $222,800 to make monthly payments of $5,570, including principal, interest and taxes on a 30-year fixed-rate mortgage, assuming a 20% down payment and an interest rate of 7.39%. 

In comparison, more than a third of the nation’s households could afford to purchase a $391,700 median-priced home, which required a minimum annual income of $104,800 to make monthly payments of $2,620.

“The end of 2023 marked the second consecutive quarter that the interest rate rose above 7% in more than two decades,” Eileen Giorgi, president of the Silicon Valley Association of Realtors, said.  “Although interest rates have eased since their peak in mid-October, they are still elevated.” 

She noted that on Feb. 13, the national average 30-year fixed mortgage interest rate was 7.14%, increasing three basis points from the previous week, according to Bankrate.

“These higher mortgage rates and high home prices, due to limited inventory, are hurting housing affordability in our area and most of the state, raising the cost of borrowing to near all-time highs,” Giorgi said.

San Mateo, Santa Clara counties

According to the Affordability Index report, San Mateo is the only county in the state where homebuyers need a qualifying minimum income of  more than $500,000 to afford the market’s median-priced home of $1.938 million. In this market, only 17% of homebuyers could afford to purchase a home.

In Santa Clara County, which requires the second-highest minimum income to qualify for the  market’s median-priced home of $1.75 million, only 18% of homebuyers could afford to purchase a home. 

Marin County, in the east bay, followed just behind with a minimum qualifying income of $441,200.

Least- and most-affordable markets

Mono, Monterey and San Luis Obispo were the least affordable counties in California, according to the Affordability Index, which measures a person’s ability to afford an item compared to their income or the average income for their county or market. Only 5% of buyers in Mono County could afford to purchase a home, and only 8% could afford homes in Monterey and San Luis Obispo counties.  Homebuyers needed at least a minimum income of $242,800 to purchase a median-priced home in each of those markets.

Lassen and Tehama counties in northern California remained the most affordable markets in the state and were the only two counties to record an affordability index of 40% or higher. Lassen had an affordability rate of 49%, and Tehama had a rate of 40%. At 36%, Shasta County, also in northern California, trailed behind as a distant third. 

Of all counties, Lassen required the lowest minimum qualifying income of $66,800 to purchase a median-priced home.

“There’s no telling what the Federal Reserve will do at its upcoming March meeting,” Giorgi said. “Since the economy remains strong, the Fed may not cut rates as previously projected. Economists expect rates to remain elevated through the first half of the year, which would continue to weaken housing affordability, particularly for first-time homebuyers.” 


Silicon Valley Association of Realtors (SILVAR) is a professional trade organization representing 5,000 Realtors and affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.

The term Realtor is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of Realtors and who subscribes to its strict Code of Ethics.