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So you're interested in buying a house in California? After all, how could you not be?
Whether you're looking to lay down roots near some of the most beautiful beaches in the U.S., establish a home base in gorgeous forests shadowed by redwoods, settle down in a thriving city that's booming in innovation, or discover more desert-like landscapes - you truly can have it all when living in California!
But to really lock down your dream home in The Golden State, you'll no doubt want to thoroughly understand how to buy a house in California - from income requirements to navigating the real estate market and so much in between - as this is key to ensuring you're getting the best deal and settling in with a smile!
From first time homebuyers to seasoned investors, we'll cover everything there is to know about the process of buying a house in California.
Table of Contents
Step by Step: How to Buy a House in California
Take it slow and let these steps guide you toward your next chapter of buying a house in California!
Step 1: Understanding the California Housing Market
Let's start with the basics - the current state of the real estate market in California. The cost of living in most California locales is high - for example, the cost of living in San Diego is 42% above the national average, as is the cost of living in Carlsbad - and this is often due to the high housing costs.
That said, you can still find vastly different premiums depending on where you buy.
Average Cost of Buying a House in California
How much does it cost to buy a house in California? The California median home sale price currently hovers at $832,500 as we move deeper into 2025, yet location is everything.
In Los Angeles, you’ll find a median of about $1.1 million, while those looking into moving to San Diego homes will be looking at homes that command roughly $990,000. High-demand markets like San Francisco push the median to around $1.4 million, whereas areas like Sacramento sit closer to $488,000. That’s a big range and one reason many buyers ask, “How much is it to buy a house in California?”
It truly depends on where you’re looking. Seasonal swings can also affect prices, with spring and summer seeing more listings but also more bidding wars. Meanwhile, overall housing supply in California has ticked up in recent months, giving buyers more choices than they had a year ago. Even so, the market remains competitive, and staying informed about local trends is crucial when you’re ready to take the plunge into California homeownership.
Having this knowledge is the first step toward looking at areas you can afford and those that simply do not make sense when buying a house in California.
Step 2: Evaluate Your Finances
The first step to buying a house in California is knowing exactly what you can afford and how much money you'll need both liquid to cover the down payment and in income for the mortgage, repairs/maintenance, etc.
How Much Money Do You Need to Buy a House in California?
Income, savings, and credit all shape your home-buying power. While requirements vary by lender, a credit score above 620 is often a key threshold for conventional loans, though higher scores can unlock better interest rates. You'll need anywhere from 3%-20%+ of the home value as liquid cash for the down payment.
Begin by examining your monthly expenses and setting a realistic budget. A solid financial foundation and mindful approach to debt can really set you up for success in understanding how to buy a house in California.
How Much Do You Need to Make to Buy a House in California?
Mortgage lenders consider your debt-to-income (DTI) ratio, usually aiming for 43% or lower. But in high-cost areas, you might need some flexibility. For instance, if you buy a $800,000 home - about the median price in California - with 20% down ($160,000), you’ll have a $640,000 mortgage.
At a 5% interest rate over 30 years, that’s roughly $3,434 a month in principal and interest alone. Add in property taxes (around 1% of purchase price, or $667 per month), insurance, and possibly HOA dues, and your total monthly housing cost could be around $4,200. To keep a 43% DTI, your pre-tax monthly income should ideally exceed $9,700 (roughly $116,400 per year).
Balancing these expenses, along with ongoing bills like utilities, helps ensure you stay comfortable long after closing.
How Much Down Payment to Buy a House in California?
You’ve likely heard 20% is the gold standard for conventional loans, and it can help you avoid private mortgage insurance (PMI). That’d mean a $160k downpayment on a $800k house.
However, Federal Housing Administration (FHA) loans allow as little as 3.5%, which equates to $28,000, while VA/USDA options can go as low as 0%. The right choice often depends on your savings and long-term financial goals.
How to Buy a House in California With Low Income
Special loan programs, grants, and “house hacking” (renting out a portion of your property) can transform dreams into reality, as can a down payment assistance program. In addition to CalHFA products, explore payment assistance programs like the Golden State Finance Authority (GSFA) program or CalHFA’s Forgivable Equity Builder Loan, which can help cover down payments or closing costs.
You’ll need to meet specific income thresholds and purchase price limits - plus complete a homebuyer education course - but if you remain in the home for a certain number of years, parts of the loan may be forgiven.
Remember, closing costs typically range from 2-5% of the purchase price, so having an emergency fund on hand ensures you stay afloat when unforeseen expenses arise. With careful planning and the right resources, navigating how to buy a house in California is more manageable than you’d ever imagined!
Step 3: Decide if Buying a House in California Is Right for You
Standing on the threshold of buying a house in California is exciting but can also feel overwhelming! California’s housing market has historically delivered robust property values, meaning you can build equity and potentially watch your investment appreciate over time.
On the flip side, high purchase prices, property taxes (visit our guide to San Diego property taxes), and steep insurance rates can weigh heavily on your monthly budget. There's also fears of certain natural disasters, like the recent Los Angeles fires, that can turn people away.
Ask yourself if you’re prepared for the long-haul: Do you have a stable source of income? A solid savings plan? And do you truly love the area you’re settling into?
Is Buying a House in California Worth It?
In truth, it depends on your goals. If you crave long-term growth and see your home as both a place you love and an asset, California’s consistent property appreciation is quite alluring and definitely worth it. After all, the state has so much to offer, from recreation to incredible downtown scenes, and so much more.
Just keep in mind that with opportunity comes financial responsibility - monthly mortgage payments, ongoing maintenance, and higher taxes are part of the deal, so the more prepared you are, the more 'worth it' it becomes.
How Old Do You Have to Be to Buy a House in California?
Legally, you must be 18 to sign a mortgage contract, but lenders may prefer established credit and financial history. Ultimately, beyond age, you'll want to be emotionally and financially stable with a clear vision of your future if you're serious about buying a house in California at a young age.
Step 4: Get Pre-Approved for a Mortgage
Imagine finding your absolute dream house but then watching it be ripped away because you couldn't provide your finances in time. Harsh, but it could happen, which is why a mortgage loan pre-approval is your golden ticket in the competitive California housing market, as it proves to sellers that you're serious about buying a house in California with readily available funds.
To get started, request a credit report and address any issues (like late payments or errors) that might hinder your approval. Next, gather essential documents: W-2s or 1099s for at least two years, bank statements, tax returns, and proof of steady employment. If you’re missing a W‑2, request it from your employer or the IRS; employers who need to prepare one for income verification can get a W‑2 form online with FormPros. Lenders will use these to calculate your maximum loan amount - often more reliable than a quick online calculator. Most pre-approvals last 60 to 90 days, so plan your house hunt within that window.
Compare at least two or three lenders or brokers to shop rates and terms, as one might offer a lower interest rate, while another might waive certain fees. Keep in mind, even a fraction of a percent difference in interest can save you thousands over the life of your loan. If you’re feeling overwhelmed, don’t hesitate to ask friends, family, or a trusted real estate agent for recommendations.
How to Buy a House in California First-Time Buyer
If this is your first time purchasing a home, be prepared for extra steps. Many lenders require new buyers to complete a homebuyer education course, teaching you everything from budgeting to closing documents. While it can feel like an added chore, these programs often unlock down payment assistance, reduced PMI, or special interest rates designed to help you thrive in the California housing market.
Step 5: House Hunting & Working With a Realtor
A real estate agent can be your guiding light in the local real estate market, offering expert insights, helping you craft competitive offers, and steering you through the mountains of paperwork.
In California, commissions typically range from 5-6% and are split between the buyer’s and seller’s agent. But the good news for buyers? The seller usually covers the buyer’s agent commission, so you can benefit from professional guidance at little to no direct cost.
Beyond saving time, agents help you weigh crucial details regarding the home buying process, like property disclosures (California’s strict rules require notice about earthquakes, wildfires, and flood zones), HOA fees, and local regulations on short-term rentals.
If you’re feeling stuck on which area suits you best - coastal cities with ocean breezes, bustling tech hubs, or quiet inland suburbs - an agent’s local knowledge can be invaluable. They will:
Simplify open house scheduling
Filter out unsuitable listings
Ensure you don’t overlook potential money pits or hidden gems.
Attending open houses is still highly suggested if you're buying a house in California. It's the best way to get a first-hand-feel of the neighborhood's vibe and really envision life there.
Pair that with powerful online search tools like Redfin and Zillow, and you're bound to stumble on the perfect place to call home.
Buying a House Without a Realtor in California
Buying a house in California without a Realtor can save you from paying any buyer’s agent commission, but you’ll need to handle every detail on your own, from researching comps and scheduling showings to negotiating contracts. Without professional guidance, you risk missing negotiation opportunities or overlooking important disclosures.
If you have the time, confidence, and market savvy, FSBO (For Sale By Owner) might be an option; however, most people find that hiring a pro reduces stress and helps secure a better deal in California’s competitive housing market.
Step 6: Making an Offer & Negotiating
Once you’ve found the home that ticks all your boxes, it’s time to draft a formal offer, usually using a standard contract from the California Association of Realtors (C.A.R.). Your offer will include purchase price, desired closing date, and an earnest money deposit (often 1-3% of the purchase price).
This deposit shows you’re serious but is typically refundable if your contingencies aren’t met. Common contingencies cover financing (ensuring you secure a loan), appraisal (confirming the property’s value), and inspection (allowing you to walk away or renegotiate if major defects are discovered).
In a multiple-offer scenario or hot market, you may consider offering above asking, paying a larger deposit, or shortening contingency periods. Some buyers also get creative, like agreeing to flexible closing dates to accommodate the seller’s schedule. Keep in mind, waiving or reducing contingencies can make your offer more attractive but leaves you with less protection if something goes wrong.
Once the seller accepts, you’ll enter escrow, a neutral holding phase managed by an escrow company. California escrow timelines typically run 30 days, though it can be 21 to 45 days depending on financing and negotiations. During escrow, inspections, appraisals, and final loan approvals occur. If all goes smoothly, you’ll finalize buying a house in California with a stack of signed documents, and the keys to your dream home will soon be yours to hold.
Step 7: Home Inspections, Escrow & Closing
When you’ve agreed on a price and terms, the inspection phase ensures no hidden surprises before you officially buy. Beyond a general home inspection, California buyers often order:
Pest/termite inspections - common in warmer climates.
Mold checks - particularly in coastal regions or older homes.
Earthquake retrofitting evaluations - crucial if you’re in a fault-prone zone.
Soil stability tests - useful for hillside properties.
County-specific safety certifications (e.g., water heater bracing).
Once inspections are done and any repairs or credits negotiated you’ll enter escrow. Typically, a title company or escrow company acts as a neutral third party to:
Hold funds (earnest money and down payment).
Oversee paperwork (making sure documents comply with state law).
Divide costs/fees per regional customs (some counties split evenly, others expect sellers to pay more).
During escrow, you’ll finalize:
Financing - lock in your interest rate and satisfy lender requirements.
Title checks - confirm there are no outstanding liens or boundary disputes.
Homeowner’s insurance - proof is often required before closing.
Shortly before closing, do a final walk-through to ensure the property matches agreed-upon conditions.
Then comes signing your loan documents, a time-intensive step where legal ownership transfers to you. Closing costs can include lender fees, title insurance, prepaid taxes, and escrow fees. If last-minute issues surface, such as previously undisclosed damage, negotiations may reopen briefly. Otherwise, you’ll leave the closing table with keys in hand, ready for life in your brand-new California home.
Step 8: First-Time Home Buyer Programs & Assistance
While buying a house in California can sometimes feel out of reach because of the high prices and down payments, the state offers a handful of first time home buying programs in California, as well as city-specific ones like first time home buying programs in San Diego, to ease the burden.
CalHFA First Mortgages: Enjoy 30-year fixed-rate loans designed for low to moderate incomes.
MyHome Assistance: A low-interest, deferred-payment “junior loan” that provides up to 3-3.5% of the purchase price for your down payment or closing costs.
GSFA Platinum: Up to 5% in assistance, which may be partially forgivable if you meet certain criteria (e.g., working in specific professions).
Eligibility Requirements: Typically, you must be a first-time buyer (no homeownership in the past three years), meet income caps that vary by county, have a credit score around 640–660, and complete a homebuyer education course.
Pairing with Federal Loans: Many of these programs coordinate seamlessly with FHA, VA, or USDA mortgages, covering the down payment, or even closing costs, you’d otherwise have to pay upfront.
These options can really help make buying a home in California an attainable ordeal.
Make Life in California a Reality!
When you’re done buying a house in California, our San Diego movers are here to help settle you in! No matter where you’re going in the Golden State, we can accommodate a wide range of moving needs. Call our moving crew at 619-591-0079 for your customized quote today.
Bill Lovejoy
Bill Lovejoy is the president of Republic Moving and Storage. Purchasing the assets of Republic Relocations in May 2008. In 2008, Republic did $700K of business and today is over $15 Million. Republic was named AMSA’s 2010 Agent of the Year for Service Excellence after only two years in business.
Bill is proud that he grew up doing every facet of the business from a local mover, over the road driver, salesperson, operations manager, and general manager. (and just about everything else in between) Before purchasing Republic, Bill was with Bekins Moving and Storage where he served as a Senior Vice President and was a partner. He was responsible for three HHG companies as well as two logistics companies.
A proud Father of six children, and a lovely wife, Carol, Bill constantly works to keep a balance between work and family Life. Bills “stress relieving” hobbies include racket ball, basketball, tennis, and golf.
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