Want to Own a Bay Area Home? Set Aside Your Next Decade of Paychecks.
Bay Area homeowners face one the largest home purchase burdens in the country, with the average household spending roughly eight to nine years’ worth of income to pay for the property, says a new report. And for single buyers, who typically lack an additional income stream, the weight is much greater.
Using home sales and income data from Zillow and the U.S. Census Bureau, CityLab and the Martin Prosperity Institute determined the length of time – measured in number of years’ worth of income — it takes both households and singles to purchase a home in metro areas across the country. CityLab notes that because its analysis does not factor in mortgage rates or down payments, the metric is intended to calculate the relative burden of housing costs by location.
Regardless of marital status, nine out of 10 U.S. markets where it takes the greatest number of years to buy a home are in California, a consequence of high housing costs. And in some parts of the Bay Area, buyers can expect to spend almost three times as long as the average U.S. buyer to own a home.
The study estimates that it takes 9.0 years of income for the average buyer to purchase a home in the San Jose metro area, tied for second longest in the nation with Los Angeles. Buyers in San Francisco can expect to shell out 8.8 years’ worth of income to purchase a home, fourth longest in the U.S., while those in Santa Rosa will spend 8.0 (No. 8) years paying for a property. Across the country, the average citizen could expect to pay 3.3 years’ worth of income to buy a home.
Those numbers are for households, which often have multiple income streams. That’s not the case for single homebuyers– a demographic that has doubled over the past 55 years — who face “a great housing burden,” CityLab says, particularly in high-cost regions such as the Bay Area.
Singles in San Francisco will need to set aside 16.8 years’ worth of income to purchase a property, second highest in the nation. San Jose ranked No. 3, at 16.2 years, followed by Napa at No. 8 (14.9 years) and Santa Rosa at No. 9 (13.9 years). Across the U.S., the average single buyer spent 6.1 years’ worth of income to purchase a property.
(Image: Flickr/401(K) 2012)