Report: affordable Bay Area starter homes out of reach for most

The median starter home in San Francisco costs as much as the median starter homes in the top 10 most affordable cities combined, according to a new report from Point2Homes.

Nationwide, nearly 70% of all new housing in the 1940s were starter homes — single-family houses with 1,400 square feet or less that started at about $7,000. By 1980 that share fell to 40%. Then, in 2019, the U.S. Census Bureau reported that only 7% of all new homes were represented by the small, entry-level homes that are affordable for first-time buyers, according to the report.

In the Bay Area, the affordability issue is even more acute.

In San Francisco, the average renter household made $100,715, but the amount a first-time buyer would need to comfortably cover mortgage payments is $251,190. This means that San Francisco renters are $150,475 (or 60%) short of attaining homeownership, according to the report.

San Jose renters were more than $100,000 short of the amount they would need to cover their mortgage on a starter home, the report states. Renters' average household income in San Jose is $84,730, but would need to be $226,720 to buy a home. In Oakland, renters' average household income is $57,431, but would need to be $154,213 to buy a starter home.