How much do you need to buy a house in California? Here’s how the numbers compare to 1970
Buying a home is one of the biggest financial hurdles for Californians.
A recent GoBankingRates study compared the savings needed to purchase a home in 2024, compared to 1970, revealing the drastic shifts in the real estate market over the decades.
“The savings needed for millennials to buy a first home is drastically different than boomers, even when adjusting for inflation,” GoBankingRates said.
The study found that California ranked among the top 10 most expensive states for homeownership in 2024.
Hawaii claimed the top spot.
In 1970, homes in Hawaii were valued at $35,100, or $283,316 in today’s dollars, requiring $56,663 for a 20% down payment.
More than 50 years later, the average home value in Hawaii is $971,644, and would-be homebuyers have to save up $194,329. for a down payment.
Here’s how much you need to save to buy a house in California compared to 1970:
How much do you need to save to buy a house in California?
The savings needed for a 20% down payment on a California home have soared over the past half-century or so, increasing by more than $100,000 when adjusted for inflation, according to GoBankingRates.
In 1970, the average California home was valued at $23,100, or $186,456 in today’s dollars.
By 2024, the average home value had skyrocketed to $783,233, GoBankingRates said.
While Californians needed $37,291 for a 20% down payment in 1970, they now need $156,647.
That’s an increase of $119,355.
Which states are the most expensive for homebuyers?
GoBankingRates said these were the 10 most expensive states to buy a home in 2024, requiring significant savings:
- Hawaii
- California
- Massachusetts
- Washington
- Colorado
- Utah
- Oregon
- New Hampshire
- Montana
- New Jersey
What are the best ways to save for a house?
According to GoBankingRates, these tips can help you build your savings:
- Assess your financial situation.
- Create a budget.
Keep your savings in an account with a higher interest rate.
Increase 401(k) contributions.
Save any extra cash.
“Whether your financial goals are buying a home, planning for retirement, purchasing a car or planning a wedding, the savings you’re able to start building now will help you achieve these milestones,” GoBankingRates said.
How did GoBankingRates come up with its findings?
To compare the savings needed to buy a home in 1970 to what’s required in 2024, GoBankingRates sourced each state’s home values from 1970 in unadjusted dollars to calculate the savings needed for a 20% down payment at that time.
Using Zillow to find 2024 home values, the site applied the same calculation and adjusted for inflation in today’s dollars.
GoBankingRates then determined how much savings would be required to afford a 20% down payment for all 50 states in both 1970 and 2024.
This story was originally published October 18, 2024 at 6:00 AM.
