If mortgage rates fell to zero, the typical home in Los Angeles and Orange counties would remain out of reach to a house hunter.<\/p>\n
My trusty spreadsheet<\/a> peeked at a study by the real estate investment site Ziffy.ai<\/a> that considered a monthly house payment at May\u2019s median listing price \u2013 with no interest charged \u2013 in 364 U.S. metro areas, including 24 in California. A community was deemed to be \u201cunaffordable\u201d if this estimated house payment exceeded 30% of the local median household income, assuming a hypothetical buyer made a 20% down payment and paid 1.6% of the purchase price for property taxes and insurance.<\/p>\n Consider how that translated to the median-priced L.A.-Orange County residence at $1.1 million.<\/p>\n A potential buyer faced a $3,911 monthly payment with a zero-percent mortgage, plus property taxes and insurance. That would eat up 49% of the metro\u2019s median household income, failing the 30% affordability maximum.<\/p>\n This kind of deep affordability hurdle is a key reason why only 85,300 L.A.-Orange County homes sold in the year ended in April. This represented a 25% drop below the average pace since 2005. It was also slower sales than any time during the Great Recession\u2019s housing crash.<\/p>\n Big burdens<\/p>\n To be fair, this is not just some L.A.-Orange County oddity as 41 other U.S. metros \u2013 including 10 in California \u2013 would not have met this 30% affordability standard in May if the lender didn\u2019t charge interest.<\/p>\n In fact, the six most unaffordable spots in the nation were from the Golden State, by this math. L.A.-Orange County had the nation\u2019s fourth-worst bite of incomes by its estimated mortgage payments.<\/p>\n For L.A.-Orange County house hunters seeking a bargain, this report suggests eyeballing the Inland Empire.<\/p>\n Its $2,116 house payment \u2013 that\u2019s a $595,000 home with a 0% mortgage \u2013 would be considered affordable, by this math. This burden gobbles up just 28% of the I.E. median income and is \u201conly\u201d the 55th worst slice in the nation.<\/p>\n Other California crushes<\/p>\n At the top of the nation\u2019s cost-burdened list was the Santa Maria-Santa Barbara housing market. Its $1.75 million median listing price would generate a $6,212 monthly payment with at 0%. This huge financial crush would eat up 78% of the metro area\u2019s median household income.<\/p>\n Here are the nine other Golden State metro areas that fail the affordability test at 0%:<\/p>\n \u2013 Salinas: $1.24 million median price would cost $4,396 monthly at 0%. That\u2019s 57% of income. This was the No. 2 worst nationally.<\/p>\n \u2013\u00a0Santa Cruz: $1.3 million median costs $4,600, 51% of income, No. 3 worst nationally.<\/p>\n \u2013 Napa: $1.4 million median costs $4,967, 49% of income, No. 5 worst.<\/p>\n \u2013 San Luis Obispo: $1.08 million costs $3,822, 46% of income, No. 6 nationally.<\/p>\n \u2013 Santa Rosa: $972,500 median costs $3,458, 39% of income, No. 14 worst.<\/p>\n \u2013 Ventura County: $984,735 median costs $3,501, 37% of income, No. 15 worst.<\/p>\n \u2013 San Diego County: $929,000 median costs $3,303, 36% of income, No. 18 worst.<\/p>\n \u2013 San Jose: $1.4 million median costs $4,924, 36% of income, No. 20 worst.<\/p>\n \u2013 San Francisco: $996,500 median costs $3,543, 31% of income, No. 31 worst.<\/p>\n