Buying your first home in California

The affordability reality

California's median home costs about $765,000 — nearly double the national median of $403,200. To carry that at the standard 28%-of-income rule you'd need roughly $192,600 a year, but the typical California household earns about $100,600. That leaves a gap of $92,000 between what a median home asks and what a median household makes — the reason a single income rarely stretches to a median home here.

Practically, that puts most median-priced homes in reach of dual-income households or the higher-earning roles the state is known for — software engineer, doctor, lawyer, and similar. If you're buying on one income, expect to look below the median or further from the coast.

The insurance question to settle first

California's headline premium looks reasonable — about $1,600 a year against a national average of $2,543 — but that number is misleading, and insurance is the step most likely to derail a California purchase.

California's ranked average is misleading — major insurers (State Farm, Allstate, Farmers) have exited or restricted new policies in wildfire-prone areas. Many homeowners in high-risk zones are on the state FAIR Plan at much higher rates with limited coverage. Research insurance availability BEFORE making an offer in any area with wildfire history.

The practical rule: check insurance availability for the specific address before you make an offer, not after. Standard homeowners policies also exclude earthquake damage — a real consideration in California, where it's an add-on worth pricing. See the US home insurance guide for how the pieces fit together.

Your legal footing is unusually strong

If a purchase ever goes wrong, California gives homeowners more protection than most states. California's Homeowner Bill of Rights (HBOR) is among the strongest foreclosure protection frameworks in the country. For purchase-money loans (the original loan used to buy the home), California completely bars deficiency judgments. A 2025 law (AB 130) also protects against 'zombie' second mortgages.

If buying in a wildfire-prone area, California AB 238 (2026) provides up to 12 months mortgage forbearance for wildfire victims. Research insurance availability in your specific ZIP code before making an offer — some areas face insurer exits and limited coverage options. Foreclosure here is typically nonjudicial and runs around 4months, and California's anti-deficiency rules mean a lender generally can't chase you for a shortfall on your original purchase loan.

General overview only — laws change. Consult a real estate attorney for advice specific to your purchase.

Programs that help first-time buyers

• CalHFA MyHome Assistance
• CalHFA Zero Interest Program
• Dream For All Shared Appreciation Loan

California's Dream For All shared-appreciation loan is the standout: it lends part of the down payment in exchange for a share of the home's future gain — powerful, but understand the trade-off before signing.

Run your own numbers

Averages only get you so far. Put your real price, down payment, and rate into the California mortgage calculator to see the monthly payment, and the deposit guide to weigh how much to put down.