An aerial perspective of the vibrant San Diego housing market with diverse architecture.
Housing affordability in California is at a historic low, with only 17% of households able to afford a median-priced home. In San Diego County, the median home price has soared to $1.03 million, requiring an income of $266,800. This trend reflects ongoing challenges in the housing market, exacerbated by rising mortgage rates. While some areas like Imperial County show more accessible prices, statewide, the struggle for affordability remains critical, especially for young professionals. Local officials are urged to enact policies to improve housing options.
San Diego, California – Housing affordability in California continues to decline, remaining at a historic low as home prices surge. In the first quarter of 2025, only 17% of households across the state could afford to purchase a median-priced existing single-family home. This figure represents an increase from 15% in the fourth quarter of 2024 but has remained unchanged since the same time last year.
Specifically, in San Diego County, the average price of a median existing single-family home soared to $1.03 million, necessitating a minimum annual income of $266,800 for potential buyers. Only 12% of residents in the area are financially equipped to purchase a home at this price point. Comparatively, Los Angeles County homeowners face a median price of $862,570, requiring an annual income of at least $222,000. Orange County presents even greater challenges with a median home price of $1.45 million, demanding a substantial annual income of $373,200.
Conversely, Imperial County exhibits more accessible housing, where residents need about $103,000 annually to afford a median-priced existing home costing $399,000. Overall, the state’s housing market remains significantly strained, especially as mortgage rates have escalated to the highest levels seen in three quarters, creating further obstacles for prospective buyers.
The monthly minimum mortgage payment for a median-priced home has seen a decrease of 1.8% since the end of 2024; however, it has increased by 4.6% in comparison to the first quarter of 2024. Analysts point out that the effective mortgage rate also rose during this timeframe, influenced by instability stemming from broader economic concerns, particularly fluctuations related to trade policies.
In a more competitive market, the share of households that can afford a typical condo or townhome remains at 24%, with an annual income of $172,400 necessary to purchase a median-priced unit priced at $670,000. Nationally, affordability appears to be less daunting, with 37% of households capable of affording a median-priced home of $402,300, based on an annual income of $103,600.
Despite ongoing affordability challenges in San Diego, market trends indicate a gradual shift, with more homes selling below their original asking price. In February 2025, 51% of homes sold in the county closed at prices lower than their listing. This suggests that buyers may have slightly more negotiating power in today’s environment, which mirrors a national trend where approximately 44.4% of home sales included seller concessions to assist buyers—a notable increase from 39.3% in the same period of 2024.
This shift signifies what some analysts view as a correction from the unsustainable price surge experienced between 2020 and 2022, moving towards a more balanced bargaining landscape between buyers and sellers. Nevertheless, the median home price in San Diego remains approximately $850,000, which still necessitates an annual income close to $243,000.
The high costs associated with living and housing in San Diego are driving many residents away. Data indicates that nearly 31,000 more individuals relocated out of San Diego than those moving in between July 2022 and July 2023. Additionally, the region’s housing supply is not keeping pace with population growth, further exacerbating affordability issues.
Local officials are actively seeking to streamline zoning regulations and expand affordable housing options. However, experts caution that significant, long-term policy changes are necessary to address the underlying issues effectively. The affordability crisis is particularly pressing for young professionals under 30, many of whom find themselves priced out of the housing market entirely.
As California’s housing landscape remains challenging, the outlook for homeowners and potential buyers hinges on economic stability and policy measures aimed at improving affordability in the face of soaring prices.
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