- It takes 43 years for homeowners with a median income in Los Angeles to save for a 20% down payment on a median-priced home, according to home ownership investment company Unison’s 2019 Home Affordability Report.
- The report’s findings are based on homebuyers who save 5% of their annual earnings and spend 30% or less of their gross income on monthly payments.
- The median home value in Los Angeles is $US622,523, while the median household income is $US58,043, according to the report.
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For most, owning a home in Los Angeles, California is a far-fetched dream.
Consider this: If a resident starts making the city’s median income of $US58,043 at age 25 and saves 5% of their annual earnings every year, they would be 68 by the time they saved enough to put a down payment on a median-priced house.
Unison’s 2019 Home Affordability Report found that it takes an astonishing 43 years for a resident earning a median income to save for a 20% down payment on a median-priced home in Los Angeles. To put that timeframe into perspective, most workers work an average of 43 years before retiring.
The median home value in Los Angeles is $US622,523, while the median household income is $US58,043, according to the report.
The report lists Los Angeles as the least affordable city for median-income earners in the US. It ranked right above Honolulu, Hawaii and San Francisco, California – it takes an average of 40 years to save for a median-priced home in both cities.
The report’s findings are based on homebuyers who save 5% of their annual earnings and spend 30% or less of their gross income on monthly payments. The report assumes a 20% down payment, a 4.54% mortgage interest rate on 2018 data, and a 3.99% mortgage interest rate on 2017 data.
Los Angeles is home to some of the most outrageously priced houses in the country. Just consider the home that’s been nicknamed “Billionaire”; originally listed for $US250 million in 2017, it got a $US100 million price cut earlier this year and is still on the market. And then there’s Chartwell Estate, the $US245 million LA mansion whose listing price is a whopping 960 times that of the median home in the US.
And the trend extends to rentals, too. “Billionaire” is now on the rental market for $US1.5 million a month with a $US3 million security deposit. There are so many over-the-top mega-mansions in Los Angeles that if they’re not on the rental market, brokers are throwing $US100,000 parties in them and making Hollywood-style movie trailers for the homes to attract buyers.
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