In Orange County, the required household income to purchase a median-priced home has surged by 25% over the past three years. According to the California Association of Realtors, a household now needs an income of $367,600 to afford a $1.44 million median-priced single-family home in the area. This figure represents an increase of $74,400 since 2022.
The rise in required income is largely due to higher interest rates and increased home prices. In 2025, the interest rate stands at 6.9%, compared to 5.4% three years ago. Additionally, the price of an Orange County home has risen by $131,500, or 10%, since the second quarter of 2022. These factors have contributed to a monthly mortgage payment increase of $1,860, bringing the total to $9,190 per month.
Despite these rising costs, only 12% of Orange County households can afford to buy a home, a figure that has remained unchanged since 2022. The limited number of qualified buyers is one reason why homebuying in the area is 29% below historical norms, according to the Orange County Register.
This trend is not unique to Orange County. Across California, the income required to buy a median-priced home has increased by 17% over the same period. Nationally, the income needed to purchase a median-priced home has risen by 18%.
The ongoing affordability crisis is exacerbated by the Federal Reserve’s decision to end its cheap money policy and stop buying mortgage bonds in early 2022, leading to higher mortgage rates. As a result, many potential buyers are priced out of the market, further limiting the number of homes available for sale.
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