Contact: Brian Daly, The San Diego Home Buyer

Phone: (619) 888-4376


How much more pain can homebuyers take?

Jan. 25, 2022 – San Diego, CA – Apparently, San Diego home buyers can withstand much more pain than we all thought was possible. 

At the peak of the housing bubble in 2006, the median home price was $230,300, and 30 year fixed rates were at 6.76%. With 20% down the monthly payment was $1,196. The median household income was $4,071 at the time, so housing accounted for 29.8% of household income. 

Let’s apply the same calculation to today to see where buyers stand in comparison. 

The national median home price is up 53% to 353,900, but household income is also way up – 40% to $5,627. 

Using 3.65% (the average rate reported by as the current 30-year rate, and assuming the same 20% down, the monthly payment comes out to $1,295.

That’s only 23% of median household income, well below the average of 28%. 

If that 28% holds true, homebuyers could stomach interest rates up 5.25% before stretching past the affordability comfort zone. 

If interest rates keep increasing but hold at 4%; in that scenario, homebuyers could still stomach another 16.5% in home appreciation before surpassing the historical affordability average. 

In San Diego numbers, that 16.5% equates to a median price of $891,671 (up from $765,000 today). 

Eye-opening data to say the least.

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