The median home price in Los Angeles has jumped to $615,000, according to real estate website Redfin. The median individual income in the county is $27,987. It takes nearly a six-figure salary to buy a lower-priced home in this market, so you can imagine the financial ingenuity required to make even a median-priced house work for most L.A. families.
Personal finance site finder.com recently looked at “mortgage stress” in the nation's 100 largest cities and concluded L.A. was just one place shy of having the most financial anxiety when it comes to home ownership.
“Mortgage stress is generally when a homeowner’s mortgage repayment is more than 28 percent of their gross income,” the site explains. It looked at the percentage of median household income that average mortgage payments consume in each of those 100 metros.
Of course, more than half of Los Angeles renters pay a greater portion of their income than that just to keep up with their leases. Home ownership here is on a different plane.
“Los Angeles has the second-highest mortgage stress level” in the nation, a spokesman for the site says. In L.A. the average house payment consumed just slightly more than 50 percent of the median household income here, the site says.
Only San Francisco has more mortgage stress, finder.com says. There, homeowners spend 61.47 of their median household income on such payments.
Oakland came in third place with 49.73 percent spent on mortgages; New York (47.72 percent) was
The site says a median home here costs $582,100 — a bit lower than what multiple listings sites have found. However, it also pegged the L.A. median household income at $49,682, lower than what we've seen. The U.S. Census says it's actually $55,870 for the county.
In any case, if anyone can find a home in L.A. on that kind of income, godspeed. It's hard to find an apartment with that kind of pay.
“It’s concerning to see that some of the most populated cities in the country have the highest levels of mortgage stress,” says Michelle Hutchison, who's billed as a finer.com “money expert.”
Indeed. It's one of the reasons “visible” homelessness in L.A. has exploded in the last year.