Ah...the Dream! Homeownership is not just an investment. It’s rolling your sleeves up, repainting the trim, and cleaning the gutters over the weekends, creating that sweat equity. It’s inviting your friends and family over and reveling in your pride of ownership. And most importantly, it’s sleeping well every night with housing security, not at the mercy of a landlord who could raise the rent to an unaffordable amount. We all want it.Â
But what does it actually take to make it happen? We’ve all seen the news about the market and interest rates, but what does that mean for a buyer today in LA?Â
Let’s do an affordability analysis, shall we:
The Price of Paradise: The median home price in Los Angeles County varies slightly depending on the source, but it hovers around $850,000 to $999,000​​​​​​​​.
The cost of other people’s money - Mortgage Rates: As of November 2023, the average 30-year fixed mortgage interest rate is 7.69%​​. So: for an average-priced home, the estimated monthly mortgage payment would be approximately $6,420.
 Show me the money: Annual Salary: To comfortably afford this, following the rule that your mortgage should be no more than 28% of your gross income, you would need an annual salary of about $275,000.
Make it rain: Typically, a 20% down payment is ideal (if not necessary) which for the average home in LA equates to $170,000 - $200,000. Â
Despite these daunting figures, LA is where magic happens. There’s a reason it’s expensive. BECAUSE IT’S WORTH IT. Sure you can afford more house in a small town in another state. But, It's not just about buying property; it's about investing in your future in one of the most vibrant cities on the planet. With a solid plan, some smart savings, and maybe a side hustle or two, this dream really can be yours.Â
I’m always available if you’re ready to buy or sell, if you have questions or just want to vent about the market conditions. I GET IT. Â
xx,
Carolyn