In 2023, buying a home in California became increasingly unattainable for many, especially in major cities like San Jose and Los Angeles. A Harvard University study revealed that median home prices in these areas were up to 11 times higher than the average annual wages. The report highlighted a growing disparity where housing costs continue to outpace income growth, making ownership a distant dream for millions. Despite efforts to streamline building regulations and offer financial assistance, the housing market remains tight, exacerbated by high construction costs and limited available homes. This crisis is affecting both homeowners and renters alike, with no relief in sight as prices continue to climb steeply, leaving many wondering how they’ll ever afford a place to call home in the Golden State.

The cost of purchasing a home in California increased significantly in 2023 for many citizens, particularly in more populous cities, as per a recent housing study by Harvard University.

According to the survey, Northern California has some of the biggest differences between house prices and incomes.

Jill McLaughlin from The Epoch Times reported that the Silicon Valley cities of San Jose, Sunnyvale, and Santa Clara had typical home sales prices eleven times higher in 2023 than the average yearly earnings in the region, which was close to $113,000, according to the report issued on June 20.

Finding the middle of all sales—where half sold for more and half for less—will yield the median price of a home.

The same was observed at Watsonville and Santa Cruz along the coast, where house costs in 2023 were likewise eleven times greater than the average annual salary of almost $68,000.

The typical home sales price in Anaheim, Orange County, and Los Angeles County was around ten times higher than the average earnings of $98,200.

Housing costs in San Diego and Carlsbad, located further south, were almost nine times more than the average salary of $76,000 in the previous year.

“Both homeowners and renters are struggling with high housing costs,” the authors of the report, called “The State of the Nation’s Housing 2024,” wrote in its summary.

Rising mortgage rates and property prices have priced out millions of prospective homeowners across the United States. The paper states that as insurance and property taxes grow, so does the cost of home ownership.

In addition, among other constraints, the building of single-family homes is probably restricted by persistent development challenges and high construction prices.

Nonetheless, California has made several efforts in recent years to try and facilitate home ownership.

To facilitate the easier, faster, and more affordable construction of projects, state officials have loosened the procedures for environmental reviews and permits.

In 2023, the state additionally rezoned 171,000 additional developable acres that were formerly controlled by colleges and religious institutions to allow for the construction of affordable housing.

Additionally, California has launched a new grant program that covers pre-construction costs for low-income workers up to $40,000 and requires a 20 percent down payment for certain first-time homeowners up to $150,000.

Still, according to Dan McCue, a senior research associate and one of the report’s lead authors, the nation is seeing significant price rises for housing and rent that began during the COVID-19 outbreak.

At a news conference on the study on June 20, Mr. McCue stated that prices for homes have increased nationwide by 46% and that rental prices have increased by 26% since 2022.

He declared, “Not only are prices high, but they’re rising once again.” “It’s really adding insult to injury.”

According to Mr. McCue, there are roughly 30% fewer homes available nationwide than there were before the plandemic.

According to him, homeowners who are sticking put and not selling while loan rates are still around 7% are partially to blame for the shortfall. The housing inventory is at its lowest level in 20 years as a result of high prices and high mortgage rates, he claimed.

Additionally, because rents haven’t decreased despite the plandemic, rental growth has stalled. According to Mr. McCue, this is an issue for the record number of renters—over 12 million nationwide—who pay more than half of their salary for housing. This is particularly prevalent for middle-class and lower-class earnings.

Low-income homeowners are also being negatively impacted by rising property insurance premiums, which have increased by almost 35%, the survey claims.

“We also worry that, except for the wealthiest households, homeownership is becoming increasingly unattainable,” Mr. McCue stated.

“In over half of the cities, access to homeownership has really been cut off.”

However, the analysis states that there will be 1.7 million more households in the United States in 2023, indicating a further increase in the demand for single-family houses and rentals.

Mr. McCue stated that he anticipates the Gen Z generation—which currently ranges in age from 12 to 27—will have 8 million more households than it did four years ago.

The housing supply has also been impacted by immigration.

“It’s a big increase, and it’s really propping up demand,” he said.

Recently, GreatGameIndia reported that according to SmartAsset, which calculated the income a family needs to live comfortably in every US state using the MIT Living Wage Calculator, Massachusetts is the most costly state to live comfortably, and Mississippi is the cheapest.