Can You Afford a Home in San Diego in 2025? What Buyers Need to Know
In 2025, San Diego continues to be one of the most desirable—and expensive—housing markets in the U.S. With median home prices hovering around $990,000, the dream of homeownership feels increasingly out of reach for many residents. A recent study by Clever Real Estate reveals that only two U.S. cities remain affordable for median-income earners, and San Diego isn't one of them. (redfin.com)
To afford a median-priced home in San Diego, a household must earn approximately $242,560 annually. This figure is nearly four times the city's median household income, highlighting the significant affordability gap.(axios.com)
Lenders typically use the 28/36 rule to determine mortgage eligibility, meaning no more than 28% of gross income should go toward housing costs, and total debt payments should not exceed 36%. For a $990,000 home with a 20% down payment, monthly mortgage payments (excluding taxes and insurance) would be approximately $5,300. To comfortably afford this, a household must earn over $225,000 annually.(homeguide.com)
The high cost of homeownership has led many San Diegans to continue renting. For instance, a local couple earning $225,000 annually chose to rent a four-bedroom house for $3,795 per month, significantly less than the estimated mortgage payments for a comparable property. This decision allows them to maintain financial flexibility and avoid becoming "house-poor."(businessinsider.com)
While some experts predict a potential slowdown in home price growth due to increasing inventory, significant price drops are unlikely soon. Therefore, prospective buyers should carefully assess their financial situation and consider whether homeownership aligns with their long-term goals.(nypost.com)
In this challenging market, it's crucial to prioritize financial well-being over societal pressures to buy. By focusing on affordability and long-term stability, San Diegans can make informed decisions that support their overall quality of life.
