What it costs to own a home in California
A median-priced California home costs about $5,058 a month to own with 20% down at today's 6.65% thirty-year rate. That covers $4,386 of principal and interest, $498 of property tax and $174 of homeowners insurance. Staying inside the 28% front-end ratio lenders use takes a household income of roughly $216,781 a year.
- Median home price
- $854,000
- Monthly cost
- $5,058
- Income needed
- $216,781
- Property tax rate
- 0.70%
What sets the payment in California?
| Input | California | Context |
|---|---|---|
| Effective property tax rate | 0.70% | 32nd highest of 51 |
| Median home price | $854,000 | 1st highest of 51 |
| Average annual premium | $1,450 | on a $250k dwelling |
| Assessment cap | 2%/yr | assessed value cannot rise faster than this |
| Price level vs national | 110.7 | BEA price parity, 100 = US average |
| Appreciation, past year | -0.62% | FHFA index |
| Appreciation, past five years | +35.3% | FHFA index |
What makes California different
California has one of the lowest effective property tax rates in the country and some of the largest property tax bills. Both are true because of the denominator. At 0.70% of an $854,000 median, the bill is roughly $498 a month — more than five times what an Alabama owner pays at their state median, on a rate almost twice as high.
The rate is only half the story. Under Proposition 13, assessed value is fixed at the purchase price and can rise no more than 2% a year, no matter what the market does. A house bought in 2005 is taxed today on roughly one and a half times its 2005 price, while its market value may have tripled. This is why a long California hold shows a tax line on this site far below what the current value would imply — the calculator models the cap rather than the market.
Buying resets the clock. The new owner inherits the sale price as the base year value, which is why two identical houses on the same street can differ by several thousand dollars a year on tax alone, based on nothing but who bought when. Proposition 19 narrowed the inheritance exclusion that used to let children keep a parent's low base, so the reset now catches far more transfers than it did before 2021.
Prices fell 0.62% over the past year, one of a handful of states in the red, after a five-year run of 35% — well below the national pace.
How much income do you need to buy a house in California?
All four rows buy the same $854,000 house at today's 6.65% rate. The difference is entirely the down payment and the mortgage insurance it does or does not trigger.
| Down | Cash at closing | P&I | PMI | Total monthly | Income needed |
|---|---|---|---|---|---|
| 3.5% down | $29,890 | $5,290 | $652 | $6,615 | $283,510 |
| 5% down | $42,700 | $5,208 | $473 | $6,354 | $272,307 |
| 10% down | $85,400 | $4,934 | $295 | $5,901 | $252,904 |
| 20% down | $170,800 | $4,386 | — | $5,058 | $216,781 |
What is a California home bought in 2020 worth now?
Working backwards from today's median along the FHFA path for California: what that same house would have cost at the time, the rate available then, and where the loan and the equity stand today at 20% down.
| Bought | Price then | Rate | P&I | Balance now | Equity now |
|---|---|---|---|---|---|
| Mid-2010 | $444,075 | 4.74% | $1,851 | $225,057 | $628,943 |
| Mid-2015 | $490,601 | 3.98% | $1,869 | $296,923 | $557,077 |
| Mid-2018 | $563,011 | 4.57% | $2,301 | $381,000 | $473,000 |
| Mid-2020 | $622,654 | 3.16% | $2,143 | $430,277 | $423,723 |
| Mid-2022 | $758,935 | 5.52% | $3,455 | $570,024 | $283,976 |
| Mid-2024 | $835,916 | 6.92% | $4,413 | $653,161 | $200,839 |
How do wages vary across California?
Wages track local price levels closely. These are the metropolitan areas in California the calculator recognises from a ZIP code, and the pay adjustment it applies to national occupation wages there.
| Metro area | Price level | Pay adjustment |
|---|---|---|
| San Jose-Sunnyvale, CA | 122.6 | +31% |
| San Francisco-Oakland, CA | 118.4 | +25% |
| Los Angeles-Long Beach-Anaheim, CA | 113.5 | +18% |
| San Diego-Chula Vista, CA | 112.7 | +17% |
| Sacramento-Roseville, CA | 107.1 | +10% |
| Riverside-San Bernardino, CA | 106.4 | +9% |
Run a real address. These are state medians. Put in an actual California address, the date it closed and the price paid, and the calculator will work out that home's payment, its mortgage-insurance dates and the equity behind it.