California has the highest cost of living of any state, according to the federal government’s price index. The Bureau of Economic Analysis (BEA) put California’s overall price level 10.7% above the national average in 2024, with housing rents 54.3% above the national average.
In August 2026, the statewide median sale price for an existing single-family home was $901,420, according to the California Association of Realtors (C.A.R.). With 20% down and a 30-year fixed rate of 7.500%, the estimated monthly payment on a $900,000 home is $6,034, including property taxes and homeowners insurance.
Key Takeaways
- California had the highest overall price level of any state in 2024, 10.7% above the national average, and its rents were 54.3% above the national average, according to the BEA.
- At the August 2026 statewide median price, a $900,000 home at 7.500% has an estimated monthly payment of $6,034 with 20% down or $6,860 with 10% down, including property taxes, homeowners insurance, and any mortgage insurance.
- Buying that home with 20% down and no other monthly debts takes about $161,000 in household income at a 45% debt-to-income ratio, the share of gross income that goes to debt payments, or at least $145,000 at Fannie Mae’s 50% maximum.
- California’s median household income was $99,122 in Census data for 2020 to 2024, about 23% above the national median, while its median home value of $734,700 was more than twice the national median.
- California homes paid 33.61 cents per kilowatt-hour for electricity in July 2026, about 84% more than the national average, according to the U.S. Energy Information Administration (EIA).
Is California Expensive to Live In?
Yes, California is expensive to live in. California had the highest overall price level of any state in 2024, according to the Bureau of Economic Analysis (BEA). Its regional price parity score was 110.7, meaning prices overall were 10.7% above the national average, which is set at 100.
| Price category, 2024 | California | What it means |
|---|---|---|
| All items | 110.7 | Prices overall were 10.7% above the national average |
| Housing rents | 154.3 | Rents were 54.3% above the national average |
| Goods | 106.1 | Goods prices were 6.1% above the national average |
Housing costs differ the most from the rest of the country. Census Bureau data for 2020 to 2024 show the same pattern for owners and renters, and Census QuickFacts lists each figure for California and the U.S.
| Measure (2020 to 2024) | California | United States | What it means |
|---|---|---|---|
| Median home value | $734,700 | $332,700 | More than twice the national median |
| Median household income | $99,122 | $80,734 | About 23% higher |
| Median gross rent | $2,036 | $1,413 | About 44% higher |
| Median monthly owner costs, with a mortgage | $2,946 | $1,963 | About 50% higher |
| Median monthly owner costs, no mortgage | $829 | $638 | About 30% higher |
| Homeownership rate | 55.9% | 65.2% | A smaller share of households own |
| Average commute | 28.7 min | 26.4 min | About 2 minutes longer each way |
Why Is the Cost of Living So High in California?
The federal data points to housing. California’s median home value was more than twice the national median, while its median household income was about 23% higher, so buying a home takes a larger share of a California household’s income.
California’s homeownership rate was 55.9%, compared with 65.2% nationally, meaning a smaller share of California households own their homes. For those who rent, costs are also high. The BEA’s 2024 housing-rent index for California was 154.3, the highest of any state, meaning rents were 54.3% above the national average.
What Does Housing Cost in California?
C.A.R.’s statewide median sale price for an existing single-family home was $901,420 in August 2026, up 0.1% from August 2025. Condos and townhomes had a statewide median of $640,000.
Average cost of living in California for a homeowner
With a 30-year fixed conventional loan at 7.500%, a $900,000 home, and 20% down, the estimated monthly payment is $6,034; with 10% down, it is $6,860. The index reflects close to zero points. An actual quote may include discount points, an upfront fee that lowers the rate, or a lender credit toward closing costs in exchange for a higher rate.
| Cost | 20% down | 10% down |
|---|---|---|
| Down payment | $180,000 | $90,000 |
| Loan amount | $720,000 | $810,000 |
| Principal and interest | $5,034 | $5,664 |
| Private mortgage insurance | $0 | $196 |
| Property taxes | $750 | $750 |
| Homeowners insurance | $250 | $250 |
| Estimated monthly payment | $6,034 | $6,860 |
With 10% down, the loan is $810,000, which is under the 2026 baseline conforming loan limit of $832,750. A conforming loan limit is the largest loan Fannie Mae and Freddie Mac will buy. The $196 a month for private mortgage insurance (PMI) protects the lender when you put less than 20% down. With 20% down, there’s no PMI.
Census data puts the median monthly cost for California owners with a mortgage at $2,946 for 2020 to 2024. That median includes owners who bought years ago, at older prices and rates, so a new purchase at today’s prices costs more each month.
Monthly payments by region
Prices vary widely across California. C.A.R. tracks these regional medians for existing single-family homes.
| Region | Median sale price, Aug. 2026 | Change from Aug. 2025 |
|---|---|---|
| California, statewide | $901,420 | +0.1% |
| San Francisco Bay Area | $1,272,000 | -0.2% |
| Central Coast | $1,075,000 | -2.3% |
| Southern California | $900,000 | +2.9% |
| Los Angeles metro area | $850,000 | +1.2% |
| Inland Empire | $600,000 | 0.0% |
| Central Valley | $500,000 | +1.0% |
| Far North | $389,000 | +1.0% |
| California condos and townhomes | $640,000 | -1.5% |
In five regions, a 20%-down loan at the median price is under the $832,750 baseline, so the same 7.500% conventional rate applies. The income needed assumes a 45% debt-to-income ratio and no other monthly debts. Southern California’s $900,000 median produces the same estimate as the statewide median.
| Region | C.A.R. median, Aug. 2026 | Example price | Loan at 20% down | Estimated monthly payment | Income needed at 45% DTI |
|---|---|---|---|---|---|
| California, statewide | $901,420 | $900,000 | $720,000 | $6,034 | $161,000 |
| Los Angeles metro area | $850,000 | $850,000 | $680,000 | $5,713 | $152,000 |
| Inland Empire | $600,000 | $600,000 | $480,000 | $4,106 | $109,000 |
| Central Valley | $500,000 | $500,000 | $400,000 | $3,464 | $92,000 |
| Far North | $389,000 | $390,000 | $312,000 | $2,757 | $74,000 |
In the San Francisco Bay Area and on the Central Coast, a 20%-down loan at the regional median is above the baseline loan limit, so the county’s loan limit decides whether it’s a high-balance conforming loan or a jumbo loan. For a city-level look in the Central Valley, see our Fresno cost of living guide, and our guide to small towns in California covers towns with 5,000 to 30,000 residents in the same regions.
Renting in California
California’s median gross rent was $2,036 a month in Census data for 2020 to 2024, compared with $1,413 nationally. Gross rent includes the rent itself plus utilities the tenant pays.
Cost of Living in Northern California
Here are August 2026 medians for the Bay Area and Sacramento-area counties, plus Shasta, Butte, Humboldt, and Nevada counties, along with each county’s 2026 conforming loan limit from the Federal Housing Finance Agency, and the loan type you’d have with 20% down at the median price.
| County | C.A.R. median, Aug. 2026 | 2026 conforming limit | Loan at 20% down | Loan type at 20% down |
|---|---|---|---|---|
| Shasta | $389,000 | $832,750 | $312,000 | Conforming |
| Butte | $418,250 | $832,750 | $336,000 | Conforming |
| Humboldt | $439,000 | $832,750 | $352,000 | Conforming |
| Nevada | $530,000 | $832,750 | $424,000 | Conforming |
| Sacramento | $549,000 | $832,750 | $440,000 | Conforming |
| Solano | $575,000 | $832,750 | $464,000 | Conforming |
| Yolo | $648,000 | $832,750 | $520,000 | Conforming |
| El Dorado | $690,000 | $832,750 | $552,000 | Conforming |
| Placer | $692,500 | $832,750 | $560,000 | Conforming |
| Sonoma | $790,000 | $897,000 | $632,000 | Conforming |
| Contra Costa | $875,000 | $1,249,125 | $704,000 | Conforming |
| Napa | $947,000 | $1,017,750 | $760,000 | Conforming |
| Alameda | $1,285,000 | $1,249,125 | $1,032,000 | High-balance conforming |
| Marin | $1,650,500 | $1,249,125 | $1,320,000 | Jumbo |
| San Francisco | $1,875,000 | $1,249,125 | $1,504,000 | Jumbo |
| Santa Clara | $1,900,000 | $1,249,125 | $1,520,000 | Jumbo |
| San Mateo | $2,250,000 | $1,249,125 | $1,800,000 | Jumbo |
A high-balance conforming loan is a loan above the $832,750 baseline but within a high-cost county’s limit, which reaches $1,249,125 in counties such as Alameda, Contra Costa, and Santa Clara. Above the county limit, the loan is a jumbo loan, with its own down payment, reserve, and pricing requirements. Our California conforming loan limits guide lists every county.
For local detail, see our cost of living guides for Sacramento, San Jose, and Walnut Creek, Concord, and Pleasant Hill.
What Taxes Do You Pay in California?
California’s three main taxes for households are property tax, sales tax, and state income tax.
Property taxes
Under Proposition 13, the property tax rate is limited to 1% of assessed value plus voter-approved bonded debt, according to the California State Board of Equalization. When a home changes ownership or undergoes new construction, its assessed value is generally reset to market value. In other years, the assessed value generally cannot increase by more than 2% annually.
The payment estimates use 1.00% of the purchase price, a modeling assumption, which is $750 a month on a $900,000 home. Voter-approved bonds and special taxes such as Mello-Roos, which fund local infrastructure and services in some newer neighborhoods, add to the base rate, so check the actual bill for any parcel with the county tax collector. Our guide to when property taxes are due in California covers the payment schedule.
Sales tax
California’s statewide sales tax rate is 7.25%, according to the California Department of Tax and Fee Administration (CDTFA). Many cities and counties add voter-approved district taxes of 0.10% to 1.50% each, and some areas have more than one, so the rate depends on where you shop. The CDTFA’s rate lookup gives the exact rate for any address.
State income tax
California’s 2025 income tax rates range from 1% to 12.3%, according to the Franchise Tax Board. Taxable income over $1 million owes an additional 1% Behavioral Health Services Tax. California doesn’t tax Social Security benefits, while pensions and IRA withdrawals are generally taxable.
Utilities, gas, and home insurance
Electricity. California homes paid an average of 33.61 cents per kilowatt-hour in July 2026, up from 32.66 cents in July 2025, according to the EIA. The national average was 18.31 cents, so California’s residential rate was about 84% higher.
Gasoline. Regular gasoline averaged $6.189 a gallon in California for the week ending September 28, 2026, compared with $4.465 nationally, according to the EIA. That’s about $1.72 more per gallon.
Homeowners insurance. Standard homeowners policies in California don’t cover earthquake damage, according to the California Department of Insurance. Your insurer has to offer earthquake coverage at least every other year, and the California Earthquake Authority sells policies through participating insurers. In high wildfire risk areas, some owners need the California FAIR Plan, which offers basic fire coverage when traditional insurers won’t.
What’s a Living Salary in California?
A living salary in California depends on where you buy. To buy a $900,000 home, the statewide median, with 20% down and no other monthly debts, you’d need about $161,000 in household income at a 45% debt-to-income ratio. The debt-to-income ratio is the share of your gross monthly income that goes to housing and other debt payments.
Fannie Mae’s maximum through its automated underwriting system is 50%, which brings the minimum income for the same home to $145,000. That’s the most the system allows, which isn’t the same as a payment that fits your budget comfortably. Car payments, student loans, and other debts raise the income you’d need, while a lower-priced region lowers it. In the Central Valley, the estimate at a 45% ratio is $92,000, and in the Far North it’s $74,000.
Your qualifying income can also make a difference. If you’re self-employed and business deductions reduce the income shown on your tax returns, a bank statement mortgage may be an option. These loans use bank deposits to help determine qualifying income rather than relying solely on tax-return income.
For more on how lenders evaluate affordability, see our guide to what percentage of income should go to a mortgage.
What the Cost of Living in California Means for Your Next Move
The same costs affect you differently depending on where you’re starting.
If you rent in California now
A fixed-rate mortgage keeps principal and interest the same for the life of the loan, and Proposition 13 generally limits the yearly increase in a home’s assessed value to 2%. Property taxes and insurance can still change, but most of an owner’s monthly payment stays fixed once you buy.
If you’re buying your first home
Plan for closing costs on top of the down payment. Our breakdown of average closing costs in California shows what to expect, and the CalHFA MyHome Assistance Program is a deferred-payment second loan that can help with the down payment. CalHFA sets the eligibility rules.
If you already own a home in California
The home you buy next is reassessed at its purchase price, so its property tax will generally be based on that price rather than your current home’s assessed value. If you need your current home’s equity for the next down payment, our buy before you sell guide covers selling first, making an offer contingent on your sale, and buying first with a loan that uses your equity.
Homeowners 55 and older can, within limits, transfer their current home’s taxable value under Proposition 19, which our guide to the best places to retire in California explains.
If you’re moving from another state
Our guide to moving to California covers qualifying for a mortgage with a job offer and what to line up before you move. For where your budget goes furthest, see the best places to live in California.
How We Help You Plan for California Costs
We start with what you’ll actually pay each month and work back to the price range.
- We build the full monthly payment. We use the parcel’s actual tax rate, including any Mello-Roos, and an insurance quote for the specific home, so the estimate matches what you’ll pay.
- We check the county loan limit. A price that crosses the conforming limit changes the loan type, so we confirm where your loan amount falls before you write an offer.
- We compare the loan structures that fit. Points, lender credits, and temporary buydowns change the payment and the cash you need at closing, and a slightly higher rate with a lender credit can be the better fit when cash to close is tight.
- We fully underwrite your pre-approval. A fully underwritten pre-approval shows what you qualify for before you start touring homes.
Once you have a fully underwritten pre-approval in hand, you can start making offers on homes with confidence. When you get an accepted offer, we’ll jump in to help you navigate the next steps to prepare you for closing.
View mortgage rates for
November 1, 2026
Frequently Asked Questions
What is the average cost of living in California?
California’s average cost of living was 10.7% above the national average in 2024, the highest of any state, according to the Bureau of Economic Analysis. In Census data for 2020 to 2024, California’s median monthly cost for owners with a mortgage was $2,946, and its median gross rent was $2,036. A new purchase at the August 2026 statewide median, with 20% down at 7.500%, has an estimated monthly payment of $6,034.
Is California the most expensive state to live in?
Yes, by the Bureau of Economic Analysis’s measure. California’s 2024 regional price parity of 110.7 was the highest of any state, meaning prices were 10.7% above the national average. California’s index for housing rents, 154.3, was also the highest of any state.
Why is the cost of living so high in California?
Housing is the main reason the cost of living is high in California. The state’s median home value of $734,700 was more than twice the national median in Census data for 2020 to 2024, while its median household income of $99,122 was about 23% higher. California rents were 54.3% above the national average in 2024, compared with 6.1% for goods.
How much do you need to make to live in California?
The income you need to live in California depends on where you buy. Buying a $900,000 home, the statewide median, with 20% down and no other debts takes about $161,000 in household income at a 45% debt-to-income ratio, or at least $145,000 at Fannie Mae’s 50% maximum. At a 45% ratio, the estimate is $92,000 in the Central Valley and $74,000 in the Far North.
What is the cost of living in Northern California?
The cost of living in Northern California varies most with home prices. In the Bay Area and Sacramento-area counties, August 2026 medians ranged from $549,000 in Sacramento County to $2,250,000 in San Mateo County, according to C.A.R. Farther north, Shasta County’s median was $389,000, and Butte County’s was $418,250.
Does homeowners insurance cover earthquakes in California?
No. Standard homeowners policies in California don’t cover earthquake damage, according to the California Department of Insurance. Insurers have to offer earthquake coverage at least every other year, and the California Earthquake Authority sells earthquake policies through participating insurers.
How much is sales tax in California?
California’s statewide sales tax rate is 7.25%, according to the California Department of Tax and Fee Administration. Many cities and counties add district taxes of 0.10% to 1.50% each, so the total sales tax depends on the address.
Want to See What California Costs on Your Budget?
A full monthly payment, built from the actual tax rate and an insurance quote, shows what a home costs before you make an offer. A fully underwritten pre-approval adds the price range you qualify for.
Contact JVM Lending for a rate quote and a fully underwritten pre-approval.
Please Note: This blog post is for informational and educational purposes only. JVM Lending is not a tax professional, financial advisor, or legal advisor. The topics covered can be complex and may vary by location and individual circumstances. We recommend consulting a qualified professional for advice specific to your situation.
Sources
- U.S. Bureau of Economic Analysis
- U.S. Census Bureau QuickFacts, American Community Survey 5-year estimates
- California Association of Realtors, Current Sales and Price Statistics
- Federal Housing Finance Agency
- Mortgage News Daily
- MGIC rate card
- ValuePenguin, NerdWallet, and Insurify.
- Proposition 13: California State Board of Equalization
- Proposition 19: California State Board of Equalization
- California Department of Tax and Fee Administration
- Franchise Tax Board
- U.S. Energy Information Administration, Electric Power Monthly, Table 5.6.A
- U.S. Energy Information Administration
- California Department of Insurance. FAIR Plan: California FAIR Plan Association.
- Fannie Mae Selling Guide B3-6-02
- Tax Foundation
