In a recent Bloomberg report, data shows that a shockingly low number of California residents can afford to purchase a new single-family home. Making the dream of purchasing a home and starting a family a distant and fading memory.
Only 16% of households could qualify to purchase a median-priced single-family home in the second quarter, the California Association of Realtors reported Friday. That’s down from 19% in the first quarter and 17% a year earlier.
The least affordable counties in California are the usual suspects. Mono County, home to Mammoth Lakes, is the least affordable county in the state, with only 5% of residents able to qualify for a home purchase. Santa Barbara (10%), San Luis Obispo (11%) and Monterey and Orange County (12%, respectively), close out the top five.
Los Angeles County came in at 15% in the housing affordability index. San Bernardino County was the most affordable county in Southern California, with an affordability rating of 30%.
Astonishingly, though, that is not where the nightmare ends. The report goes on to say that in order to purchase a median-priced, single-family home in California, residents must have a minimal annual income of over $200,000 to afford it.
For an existing single-family home at California’s median price of $830,620, buyers in the second quarter needed a minimum annual income of $208,000 to qualify for a 30-year mortgage after a 20% down payment. Loans on condos and townhouses, with a median $640,000 price, required a minimum $160,400 income.
It continues to look like the Golden State is not a place where people can live a decent, middle-class lifestyle. Over the past seven to 10 years alone, California’s cost of living has increased exponentially. Since 2017, with the passage of SB1 (also referred to as the gas tax), consumers in the state now see an additional $0.58 per gallon of gasoline and diesel across the state.
California traditionally has had higher gas prices than the rest of the country due to state emissions standards requiring a certain blend of fuel for each season. All in total, California residents pay an extra $1.25 per gallon than the rest of the country, and for each gallon you pump, $1.18 is just taxes and fees alone. In addition to higher fuel costs, residents got hit with higher annual vehicle registration fees, and it outlawed any diesel-powered bus or truck over 14,000 pounds from being operated in the state as of this year.
When President Biden took office, the nation was already in bad shape from the COVID fiasco. Inflation was already on the rise, but after just a year in office, inflation exploded to the highest it has been since 1980, with the highest rate recorded at 9.1 percent in June 2022. Even with inflation rates coming back down, the cost of living is still at record highs. Credit card debt is at its highest in the history of the United States, with Americans compiling over $1 trillion in credit debt.
A Reuters/Ipsos poll discovered that many who voted for President Biden in 2020 now express dissatisfaction with the economic performance under his leadership, casting doubts on their support for his potential re-election bid in 2024. These sentiments underscore the broader concerns about the nation’s economic direction, reflected in the president’s consistently low approval ratings, which now linger at 40 percent.
A critical aspect of the economic struggle experienced by Americans is the unprecedented surge in credit card debt, now exceeding a staggering $1 trillion. Stubborn inflation and spiking interest rates have combined to burden consumers, who grapple with the increasing costs of essential goods and services. This dire scenario is vividly portrayed in the New York Fed’s latest Quarterly Report on Household Debt and Credit, which reveals that credit card balances ballooned by nearly 4.6 percent, with an additional $45 billion incurred during the second quarter alone.
More Californians and a majority of Americans are currently living from paycheck to paycheck. In a new report, 61 percent of Americans reported living paycheck to paycheck, with 3.3 million California residents reporting the same. With more and more financial uncertainty on the horizon, it seems that we are in for a struggle. The cost of everyday goods is still higher than normal, groceries are more expensive, as are every consumable item or resource on the market.
As of July, 61% of American adults reported they are living paycheck to paycheck.
That’s Bidenomics in action.
— Sen. Marsha Blackburn (@MarshaBlackburn) August 31, 2023
The policies that come out of Washington, and especially out of the California state legislature, are not helping. The push on the Federal and state level to increase green energy projects and products are hindering the lives of our residents. In California, the push to go to solar for all homes, and cutting natural gas resources and refineries, are driving up utility costs as well. Not to mention, the green initiative is putting an already strained power grid to reliability levels not seen in our history, Shutting off power during windy days is now common practice.
As I reported recently, California continues to push the lower and middle classes out of existence. The Democrats that rule this state with an iron fist say they are for the working man and woman, but clearly, they are for your money and that is it.
California has fallen, and Democrats are solely to blame. Californians have less money to spend, pay the most for basic necessities, and see less from the state when it comes to the return on their tax dollars. California has lost over 800,000 residents, 1 electoral vote, and a congressional seat, and the trend shows no sign of stopping. If the trend continues, which polls suggest it will, California stands to lose more congressional seats and tens of thousands or more people. If that’s a success story, one can only imagine what a failure looks like.
Something has to give, right? What will be next, when will the next shoe drop? Anybody’s guess is good enough at this point.
