Over the past two-plus years, home values in the Bay Area and across the country soared as house hunters — many untethered from the office by remote work and buoyed by historic-low interest rates — were locked in a mad scramble for homes, sometimes bidding hundreds of thousands of dollars over the asking price.
As the Federal Reserve has raised the cost of borrowing this year in a bid to slow runaway inflation, mortgage rates have spiked accordingly to around 5% for both jumbo and conforming 30-year fixed home loans. While rates have dipped in recent weeks, they’re still well above the less than 3% charge during the depths of the pandemic.
In the San Jose-Sunnyvale-Santa Clara metro area, buyers need to make over $330,000 a year to afford a median single-family home price of $1.9 million, a 29% increase in needed salary from last year, according to the report. The median annual household income in the city of San Jose was only about $117,000 in 2020, according to census data.
For the San Francisco-Oakland-Berkeley metro, buyers need to make at least $250,000 a year to afford a median single-family home price of $1.4 million, a 20% salary increase. The median annual household income in the city of San Francisco was about $119,000 in 2020. The average cost of owning a home in the metro is $5,800 a month.
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