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The Midpeninsula is home to California’s highest home prices. For four consecutive quarters, San Mateo County has held the distinction of being the only county in the state where homebuyers need to earn more than $500,000 annually to afford a median-priced home — buyers there need a minimum qualifying income of $513,200. Santa Clara County is right behind, requiring a minimum qualifying income of $487,600 annually.
In the region’s priciest cities, that number is even higher. Buyers in Atherton, Hillsborough and Los Altos Hills need to earn above $1 million annually to comfortably afford a median-priced home, according to a recent study from online real estate listing company Redfin.com.
Atherton, with a median home list price of $8.9 million in 2024, ranked No.1 in the nation as the priciest city. Buyers there need to earn $1.85 million annually. If you bought a median-priced home in Atherton with 20% down at a 6.72% mortgage rate, the monthly payment would be $46,168 — or $554,011 per year.
The typical home there would require more than triple the typical household income to afford, according to the report.
Hillsborough, with a median home listing price of $5.8 million, ranked as the fourth most-expensive city in the nation. Buyers there need to earn $1.85 million annually to comfortably afford a home. If you bought a median-priced home in Hillsborough, the monthly payment would be $30,458 — or $365,492 per year, according to the report.
Los Altos Hills, with a median listing price of $5.78 million in 2024, ranked as the fifth priciest city in the nation. Buyers there need to earn an annual income of $1.19 million, according to the report. If you bought a median-priced home in Los Altos Hills, the monthly payment would be $29,945 — or $359,347 per year.
The report looked at cities nationwide with at least 20 listings during the year and populations between 5,000 and 100,000 residents. Researchers then determined the minimum salary a person would need to afford a median-priced there, assuming a 20% down payment and a 6.72% mortgage rate when applying the 30% rule, which recommends spending no more than that much of a household’s income on housing.
Not surprising, the top five most-expensive markets in the report are all based in California. Montecito and Malibu in Southern California ranked second and third on the list.
According to the report, the typical homebuyer — even those in the country’s highest-priced towns — would need to spend more than the recommended 30% of annual household income to afford a median-priced home in their area.
Many buyers in ultra high-priced areas, however, are not taking out a mortgage, or tend to put down a more substantial down payment than the typical 10% to 20%, the report concludes.
So just how much are Peninsula homebuyers really spending on their new homes?
We’ve compiled monthly sales data from the California Association of Realtors into a series of maps to show how much the average buyer would need to spend for a one-bedroom, two-bedroom, three-bedroom and four-plus-bedroom home – along with estimated monthly mortgage fees – in the cities of Palo Alto, Mountain View, Los Altos, Redwood City, Menlo Park and East Palo Alto.
Here’s how much it cost to buy a home during the month of January.
Vacant Mountain View building condemned after 3 people, small fire found insideJanuary 16, 2026 5:15 pm
It bears repeating that ordinary people can no longer afford to buy here. Those who think that preservationist policies protect the Peninsula for ordinary folks are kidding themselves.
What preservationist policies are you talking about, ivg? Please be specific.
BTW, did you read the recent article in Calmatters, written to describe a new report put out by YIMBY Law?
“‘Limited to no impact’: Why a pro-housing group says California’s pro-housing laws aren’t producing -more” – https://calmatters.org/housing/2025/02/california-yimby-laws-assessment-report/
“Fast-forward to 2025 and this spate of recent California laws, and others like it intended to supercharge the construction of desperately needed housing, have had “limited to no impact on the state’s housing supply.”
“That damning conclusion comes from a surprising source: A new report by YIMBY Law, a pro-development nonprofit that would very much like to see these laws work.”
“The analysis, released today, studied five state laws passed since 2021 that have swept away regulatory barriers to building apartment buildings and other dense residential developments in places where such housing has been historically barred.”
Why aren’t these laws working? Two key reasons provided by YIMBY Law:
1) “the inclusion of requirements that developers only hire union-affiliated workers or pay their workers higher wages.”
2) “affordability mandates which force developers to sell or rent the units they build at below-market prices.”
What is one to make of these explanations? Will the YIMBY movement now lobby state politicians to lower the wages and benefits paid to construction workers?
Will it now lobby to reduce the number of affordable housing units that are required in new housing projects?
Will it ever admit that it was simply wrong to blame the high cost of housing on existing residents “blocking supply”? Engineers know that if one does not properly diagnose the CAUSE of a problem, a “solution” developed based on that diagnosis will NOT fix the problem. The “solutions” offered by the YIMBY movement are not working, because they never properly diagnosed the correct cause of the problem. High housing costs exist here because of a number of economic factors related to capitalism itself.
The bottom line is that nobody has figured out how to get rich by building affordable housing. THAT is why we don’t have very much of it.