Rent is only one side of the housing coin.

Rental options are only one side of the housing picture. When people consider settling down, they also think about future decisions, such as whether to have children. Often, that consideration becomes a more concrete question: can we afford to own a home?

To answer this, we construct a user cost of housing, which estimates the annual cost of owning a home after accounting for financing and expected appreciation. It includes mortgage financing costs, property taxes, insurance, and repair and maintenance costs.

30% of income

Affordable purchase price

$150k income, 10% down $707k

$240k income, 10% down $1.13M

$150k income, 20% down $873k

$240k income, 20% down $1.40M

With a goal of spending no more than 30% of annual income on housing, households in the target range can afford homes at roughly these prices under the model's 10% and 20% down-payment scenarios.

The constraint shows up quickly: at $150,000 in income with a 10% down payment, only about 8 single-family homes per year cleared the affordability threshold under this model.

Single-family homes

Affordable homes per year by income group

Goleta single-family homes affordable per year at 50% of income — Affordable at 50% of income