The monthly payment to purchase an entry-level California home has risen 88% since 2020, according to a new report from the non-partisan, state-funded Legislative Analyst’s Office. With the ongoing wildfires having destroyed over 10,000 buildings in high-income areas, prices are primed to go up even further as wealthy families seek new shelter. 

“Payments for a mid-tier home were nearly $5,800 a month in December 2024 – an 84% increase since January 2020. Payments for a bottom-tier home were over $3,500 per month – an 88% increase since January 2020,” wrote the LAO. “This rapid increase in monthly costs for homebuyers was driven by higher home prices and increasing mortgage rates.”

The LAO also notes that home prices dropped briefly early in the pandemic during 2020; rising prices spurred by low interest rates drive home payments to rise even as rates remained steady, with rate increases starting in 2022 making financing those higher purchase prices even more expensive. 

The LAO says that this rapid increase in mortgage rates from 3% before 2022 to 7% now means that many homeowners can’t afford to move, even if they wanted to, thus putting further pressure on housing prices as fewer homeowners decide to sell.