Even with one of the nation’s highest pay levels, California home affordability remains out of reach for many buyers. New figures show the average hourly wage is $41.09, yet a buyer would need about $70 per hour to purchase a median-priced home—underscoring the state’s widening affordability gap.
According to Bureau of Labor Statistics data for August 2025, California’s average hourly wage was $41.09 and the average workweek was 33.2 hours, equal to $65,481.12 a year. Using a 30% income-to-housing-cost guideline with a 20% down payment, that income supports a home price of $435,157. California’s actual median price was $740,368, meaning a buyer would need 70.1% more income.
That shortfall equates to an additional $28.76 per hour—$69.85 total—or roughly $111,312 a year. Put another way, someone earning the state average would need to work 23.2 more hours each week to afford the median home.
Other high-wage states also struggle. Washington averaged $42.30 per hour but still fell 42.9% short of what’s needed for a $639,975 median home. Massachusetts averaged $41.74 per hour and would need 69.5% more income to reach a $749,450 median. An exception was Washington, D.C., where a $54.23 hourly wage nearly matches a $584,975 median, leaving a 1.9% gap. Minnesota’s $39.53 hourly wage leaves a 9.2% cushion relative to its median price.
At the lower-wage end, Mississippi averaged $28.10 per hour and needed only 0.5% more income to reach a $299,000 median home. New Mexico’s $29.14 wage fell 29.6% short, while Arkansas’s $29.62 wage was 2.5% above the minimum needed for its median.
Ben Mizes of Clever Offers said higher local incomes qualify more borrowers, intensifying competition and pushing home prices up. Martin Orefice of RentToOwnLabs similarly noted that in many high-income markets, supply imbalances erode real buying power, keeping some high earners in rentals.
BY HOONSIK WOO [woo.hoonsik@koreadaily.com]
