California Mortgages : 50Year Analysis
Between April 1971 and September 2022 , the average 30year fixed mortgage rate was 7.76 %. Today ’ s 30year fixed rates for consumers are fairly close to this historical 50year average , depending upon their creditworthiness and whether it ’ s a conventional , FHA , VA , or nonQM type of loan .
The 30year fixed rate peaked near 18.6 % in October 1981 . In January 2022 , some 30year fixed rates temporarily reached the high 1 % to low 2 % rate range .
Over the past 50 years , the typical California homebuyer spent 43 % of their income on house payments . Today , the average homeowner spends closer to 58 % to 65 %+ of their monthly gross income on mortgage payments ( principal , interest , taxes , insurance , and HOA , if applicable ). After paying state and federal income taxes , many California homeowners are more likely paying closer to 70 % to 80 % of their net monthly income towards their monthly housing debt .
The median price of a California home over the past 50 years was $ 331,000 . In September 2023 , the median statewide price reached $ 843,340 , according to the California Association of Realtors . This is almost more than double the median national home sales price that hit $ 431,000 , as per the St . Louis Fed .
Over the past 50 years , the average monthly mortgage payment was $ 1,627 at 80 % LTV with 20 % cash down . In 2022 , the average mortgage payment reached $ 4,043 / month , a 148 % increase .
In the fourth quarter of 2023 , let ’ s review a potential new mortgage payment for a median home price in California that ’ s near $ 840,000 :
Down payment percentage amount : 20 % down payment ( average is 6 % down nationwide ) Down payment dollar amount : $ 168,000 New loan amount ( 80 % LTV ): $ 672,000 30year fixed mortgage rate : 8 % ( example only , subject to change ) Monthly mortgage payment : $ 4,930.90 ( principal and interest )
This example above does not include any monthly property taxes , insurance , or homeowners association ( HOA ) payments , if applicable .
The average household income for Californians over the past 50 years was $ 45,700 . Today , the average income is closer to $ 84,000 . This 84 % increase in income isn ’ t enough to cover the 148 % increase in mortgage payments , sadly .
A 20 % down payment over the past half century for Californians was $ 66,000 . In 2023 , the average down payment increased to $ 168,000 , which is a whopping $ 102,000 down payment increase .
Finding more affordable monthly blended rate payment options are what you should focus on these days as we all see consumer debt balances and interest rates either heading towards or surpassing alltime historic highs .
MEET RICK TOBIN
Rick Tobin has worked in the real estate , financial , investment , and writing fields for the past 30 + years . He ’ s held eight ( 8 ) different real estate , securities , and mortgage brokerage licenses to date and is a graduate of the University of Southern California . He provides creative residential and commercial mortgage solutions for clients across the nation . He ’ s also written college textbooks and real estate licensing courses in most states for the two largest real estate publishers in the nation ; the oldest real estate school in California ; and the first online real estate school in California . Please visit his website at Realloans . com for financing options and his new investment group at SoCal Real Estate Investors for more details .
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