Dec 15, 2022 - Real Estate

Most San Francisco renters can't afford starter homes

Cities where renters <span style="background:  #1ac074; padding:3px 5px;color:white;">do</span> or  <span style="background: #8e8e8e; padding:3px 5px;color:white;">don’t</span> meet  income requirements for a starter home mortgage
Data: Point2Homes; Map: Tory Lysik/Axios Visuals

San Francisco renters on average earned 40% of the income they would need to afford a median-priced "starter home" in the city, per October figures from Point2Homes.

  • Researchers consider "starter homes" properties valued in the lower one-third of all available homes for sale.

Why it matters: Higher mortgage rates and housing costs are keeping homeownership out of reach for many hopeful first-time buyers in San Francisco.

By the numbers: The average household income among San Francisco renters in October was $100,715, but the income needed to cover a median mortgage was $251,190, according to the study.

  • In September, the median price for a "starter home" in San Francisco was $1,048,498, the study found by analyzing Zillow data.

Reality check: The median starter home in SF costs as much as the median starter homes in the top 10 most affordable cities … combined!

  • Following October's interest rate hike, renters in 15 of the 50 largest U.S. cities made less than half the income needed to buy one of the entry-level homes in their respective town, per the analysis.

Between the lines: There's a housing crisis in San Francisco, and the city must meet state-mandated goals to build 82,000 housing units between 2023 and 2030 to meet demand.

  • Meanwhile, it takes a median 627 days to obtain a full building permit to construct a multi-unit housing project, a recent San Francisco Chronicle analysis found. It takes even longer, 861 days, to obtain permits to build single-family homes.

The big picture: Nationwide, the number of first-time home buyers has shrunk to a record low, according to the National Association of Realtors. First-time buyers made up 26% of all buyers in 2022, down from 34% last year, the group found.


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