The housing market in Southern California is notoriously expensive, and there’s a simple explanation as to why: People want to live there, and competition drives up prices. But whether you’re dreaming of a career in Hollywood or you just want year-round perfect weather, buying a home in Los Angeles might be worth the high price.
Just how high is that price? The median sales price for homes sold in Los Angeles is $1.065 million as of May 2026, according to a housing market summary from the real estate marketplace Realtor.com.
Keep reading to learn how much you’ll need to earn to qualify for a mortgage to buy a home in Los Angeles.
What Mortgage Lenders Require From LA Buyers
When determining housing affordability, mortgage lenders use the 28/36 rule. Your monthly mortgage payments, including principal and interest as well as taxes and insurance, should not exceed 28% of your gross monthly income. All of your monthly loan obligations, including your mortgage as well as other recurring debts like auto loans or personal loans, should not exceed 36% of your take-home pay.
Excluding other debts, there are two ways to determine housing affordability: by using your salary or by reversing the formula to use the monthly payments to calculate the salary you’ll need.
Let’s say you have a salary of $80,000. Divide by 12 to convert your annual salary into your monthly income. Then, multiply that by 0.28 to find your maximum monthly mortgage payment. In this case, it’s $1,867. That amount falls significantly short of what it takes to buy a typical home in Los Angeles.
Or, if you want to know how much you should earn to afford a $2,000 mortgage payment, simply divide by 0.28 to get the monthly income needed. Multiply by 12 to get an annual salary. In this case, the salary needed is $7,143 monthly, or $85,715 yearly. Again, these are not LA numbers. So, let’s do some math.
Calculating the Typical Monthly Payment in LA
For the purposes of this exercise, we’re going to make a few assumptions:
— The home’s purchase price is $1,065,000, which is the median sales price of homes sold in Los Angeles as of May 2026, per Realtor.com data. Still, Los Angeles has all types of neighborhoods at a variety of price points. The median listing price ranges from $730,000 in Eastside LA to $3.6 million in the Pacific Palisades. Where you live in LA will impact the salary you need to buy a house.
— The buyer is taking out a 30-year fixed-rate mortgage. While this type of home loan is the most popular option among homebuyers for its low, predictable monthly payments, many high-income buyers choose adjustable-rate mortgages that start out with lower rates and monthly payments to maximize cash flow. It all depends on your financial situation.
— The loan comes with an interest rate of 6.5%, which is in line with today’s 30-year fixed mortgage rates. There are ways to snag lower rates, such as paying for mortgage discount points to buy down the rate or assuming the seller’s mortgage. But for the remainder of 2026, typical 30-year rates are expected to remain in the mid-6% range.
Two Scenarios for an LA House: What Is the Monthly Payment?
| Low-End Monthly Payment | High-End Monthly Payment | |
| Down Payment | 20% | 5% |
| Principal and Interest Payment | $5,385 | $6,395 |
| Property Tax Rate | 1.1% ($976) | 1.4% ($1,243) |
| Home Insurance | $171 ($2,046 annually) | $366 ($4,391 annually) |
| Private Mortgage Insurance | $0 | $971 |
| HOA/Condo Fees | $0 | $1,000 |
| Monthly Payment | $6,532 | $9,975 |
Using the 28/36 rule, you’d need to earn $23,329 monthly, or $279,943 annually, to be able to afford the low-end payment of $6,532.
To afford the $9,975 monthly payment on the higher end of our example, you’d need to earn $35,625 monthly, or $427,500, annually.
[Read: Best Mortgage Lenders]
Principal and Interest: $5,385 to $6,395
The bulk of your monthly mortgage payment usually goes to principal and interest. The principal is the actual amount of money you borrowed, while interest is the fee the lender charges you to borrow it. Your P&I will depend on how much the home costs, how much money you put down on the home, the repayment term you choose and the mortgage rate you pay.
Assuming you bought a home priced at $1,065,000, let’s say you came prepared with a 20% down payment (or $213,000) and landed a mortgage rate of 6.5% on a 30-year home loan. Your monthly P&I would be $5,385.
Of course, that assumption comes with a lot of variables. You could choose a 15-year mortgage, which would help you build equity faster but come with much higher monthly payments. A 30-year mortgage comes with low monthly payments, which is why the vast majority of homebuyers choose this repayment term.
You also don’t need a 20% down payment. You may qualify to put as little as 3% down with a conventional mortgage, or even 0% down if you’re an eligible military service member who qualifies for a VA loan through the Department of Veterans Affairs. A lower down payment could save you money up front and enable you to buy a home in LA without hundreds of thousands in your homebuying fund. However, a lower down payment will result in a larger loan amount with higher monthly payments.
Property Taxes: $976 to $1,243
Despite California’s reputation for being expensive, the state actually has a pretty average property tax rate, according to a study by the Tax Foundation, a nonpartisan tax policy think tank. However, the amount you pay in property taxes in Los Angeles will likely be high because home values are high.
The general tax rate for the state of California is 1%. It was capped by Proposition 13, a state constitutional amendment passed by voters in 1978. Prop 13 also caps annual assessments to rise no more than 2% per year until the next sale, which can protect LA homeowners from being displaced due to rising property values.
In addition to the 1% state-level tax, municipalities in LA have voter-approved bonds for schools and infrastructure as well as special assessments. All told, property owners in Los Angeles pay an effective tax rate of 1.1% to 1.4%, according to Randall Wealth Management Group, a financial advisor firm in Long Beach, California.
For a general estimate, you can cut it down the middle and use an estimated tax rate of 1.25%.
Home Insurance: $171 to $366
The average annual home insurance premium in California is $3,683, or $307 monthly, according to U.S. News data. That’s calculated with a dwelling limit of $800,000, using the average home cost in California, although the premiums may be slightly higher in LA since home values are higher.
On the low end of the spectrum, the annual premium would be $2,046, or $171 monthly, compared with $4,391, or $366 monthly, on the high end.
It’s more expensive to insure a home in California than elsewhere in the nation for multiple reasons. For one, a more expensive property is more expensive to insure, because it’ll cost more to rebuild in the event of a loss.
Additionally, Los Angeles has a climate risk that drives up the cost of homeowners insurance and has even driven some insurers out of the state. The Los Angeles wildfires of January 2025, which were the worst in the city’s history, are estimated to have cost up to $131 billion worth of property and capital losses, according to a research paper by economists at the University of California, Los Angeles.
Mortgage Insurance: Up to $971
If you put down less than 20% on your home purchase, your lender will require you to carry mortgage insurance. This added monthly cost protects the lender in the event of a foreclosure.
For a conventional loan, private mortgage insurance typically ranges from 0.5% and 1% of the loan amount. On a Federal Housing Administration loan, the monthly mortgage insurance premium is 0.55% to 0.75% of the loan amount for a 30-year mortgage or as low as 0.15% for a 15-year mortgage with at least 10% down.
Freddie Mac has a private mortgage insurance calculator, which we used to estimate the PMI on a $1,065,000 home with a 5% down payment: $971.
Of course, the type of mortgage insurance you need will depend on the type of mortgage you have. Notably, how much you pay will depend on your down payment amount and credit history. Having a higher credit score can help you land a lower PMI payment — and the opposite is true as well.
Note: While you might assume that a million-dollar home needs a special kind of mortgage, that’s not the case in many high cost-of-living areas — including Los Angeles. The conforming loan limit in Los Angeles County is $1,249,125 for 2026. So, you can potentially buy a median-priced home in LA using a conventional loan, or even an FHA loan, not necessarily a jumbo loan.
HOA or Condo Fees: Up to $1,000
The median monthly homeowners association or condo fee in the city of Los Angeles is $479, according to the U.S. Census Bureau’s 2024 American Community Survey, which is the most recent available publication.
However, only about a fifth of housing units require a fee, ACS data shows. Among those who do pay a monthly fee, 29% say it’s between $500 and $749. Nearly 10% pay $1,000 or more per month.
Whether You Can Afford a House in LA Just Depends
It’s safe to say that you’ll need a high household income to buy a house in LA, but you might be able to get by on the cheap if you purchase a fixer-upper or even a small condo. As a rule, though, a six-figure salary is pretty much a requirement for living comfortably in Southern California.
Getting preapproved for a mortgage through a lender can give you an idea of the mortgage amount you can qualify for, but carefully consider how the monthly payment would fit into your budget to avoid biting off more than you can chew and going housebroke.
To really find out if you can afford to buy a house in LA, you should talk to a trusted financial advisor. And if homeownership isn’t within reach, renting is always an option.
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The Salary You Need to Buy a House in LA in 2026 originally appeared on usnews.com
