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For millions of Americans, the dream of homeownership is becoming increasingly elusive — and in California, the financial barrier is especially high.

A new analysis of housing affordability reveals that the income needed to buy a typical home has soared to nearly $125,000 nationwide — far above the U.S. median household income of $77,719. In California’s most expensive cities, that figure is more than double, and in some cases, more than quadruple.

In San Jose, home to the tech hubs of Silicon Valley, a household needs to earn $547,368 annually to afford a median-priced home, according to a joint analysis by ConsumerAffairs and the Urban Institute.

In Los Angeles, where the median household income is $93,525, buyers must earn $318,103 to afford a home.

Top 10 U.S. metro areas where residents need the highest incomes to afford a home (ConsumerAffairs):

San Jose, CA – $547,368
San Francisco, CA – $386,359
Santa Cruz, CA – $377,260
Santa Maria, CA – $324,300
Los Angeles, CA – $318,103
San Diego, CA – $310,119
San Luis Obispo, CA – $293,793
Oxnard, CA – $292,252
Salinas, CA – $279,321
Honolulu, HI – $277,997

Experts say a combination of soaring home prices, high interest rates, and stagnant wage growth drives the affordability crisis.

From 2012 to 2024, the typical monthly home payment, including mortgage, insurance, taxes and maintenance, nearly tripled from $1,091 to $2,889. That means a household now needs to earn $123,826 annually to stay within the recommended “28/36” budgeting rule, the study’s authors noted.

“One of the biggest culprits for rising house prices is the lack of affordable housing supply,” said Katie Visalli, a research analyst at the Urban Institute. “Zoning restrictions and limited new construction have created a bottleneck that’s pushing prices higher and higher.”

The affordability gap has widened dramatically since 2020.

In just four years, the income needed to afford a home has jumped by nearly $57,000, an increase of more than 85%, the study found.

Meanwhile, the share of homes affordable to a family earning $75,000 has plummeted to just 21%, down from 49% before the pandemic, according to the National Association of Realtors.

For many renters, the biggest hurdle to becoming a homeowner remains the dreaded down payment, typically 3% to 20% of the sale price. Still, experts say the down payment is just the starting point.

“If you’re getting ready to apply for a mortgage, you need to know exactly how much you can afford each month — not just the loan, but insurance, taxes, and maintenance,” Visalli said.