If you're in the market to buy a home, remember that it's going to cost more than just the down payment to close the deal.
In California, the median home value is $769,405. The average home buyer would need to spend between $56,729 and $206,212 to close on a home in that price range, depending on down payment size and location.
Don't forget paying all the upfront costs included in your home purchase is only the beginning. Once you close, you'll need to begin paying for the ongoing costs of homeownership like your mortgage, utilities, and taxes.
Fortunately, Clever Real Estate can help you get started off on the right foot. By working with a Clever agent, you'll get top-notch service and may be eligible for up to 0.5% cash back after closing — that's about $3,847 on an average priced home in California.
Average cost to buy a house in California
Although there tends to be a lot of overlap in home buying costs between states, there are also items specific to California that you want to prepare for. Below is a list of the most common expenses you should expect to pay:
Expense | Description | Amount |
|---|---|---|
Earnest money deposit | Good faith money that acts like a security deposit | $7,694 to $23,082 |
Down payment (3.5-20%) | Initial cash investment in the house that determines your equity | $26,929 to $153,881 |
Reserves | Lenders often require enough cash to pay your bills for 2–3 months when buying a home | $7,005 to $10,508 |
Closing costs | Additional expenses that must be paid to close on a house | $13,491 |
Inspection | A certified inspector checks the property for any issues that need to be fixed | $234 |
Appraisal | A qualified appraiser analyzes the property and the local market to determine its fair market value | $126 |
Moving | Although it usually happens after closing, you need to account for the cost to move | $1,250 to $4,890 |
Furnishing | Many homebuyers like to fill their new home with new furniture and appliances | Varies |
Total | $56,729 to $206,212 | |
Note: All numbers are estimates based on California averages and a median home value of $769,405. | ||
Since California has one of the highest average home values in the nation, your total cost to buy a house is likely to be more expensive than other states.
Specific California closing costs
The average closing costs for a buyer in California tend to be about $13,491, but remember that this varies widely depending on your area. The average closing costs in Los Angeles, for example, will probably cost you more than Oxnard.
Escrow fees are one example of regional differences in how California handles closing costs. In the north, only title insurance companies handle escrow. In the south, separate title and escrow companies are used by both the buyer and seller. In both areas, however, the buyer and seller usually split the closing costs 50/50.
Transfer taxes are another expense to keep an eye on. The state tax rate is $1.10 per $1,000 of home value, but you could also get hit with city and county transfer taxes as well. Oakland, for example, has some of the highest transfer taxes in the nation at 1–2.5%, depending on the sale price.[1]
As a silver lining, California caps property taxes at one percent of the assessed value of a home when it is purchased. So, even though you will need to pay prorated taxes for the remainder of the year after your closing date, it will at least be lower than you would expect for most other states.
» MORE: How much will you pay for closing costs in California?
Average cost to buy a house in major California cities
As you might expect, the cost to buy a house in some parts of California are substantially higher or lower than others.
In California, some of the most popular places to buy a house include: Los Angeles, Sacramento, San Diego, San Francisco, and San Jose. Below are the average home prices and cost to buy a home in each city:
City | Average home value | Average cost to buy |
|---|---|---|
Los Angeles | $908,160 | $65,943 and $241,681 |
Sacramento | $597,181 | $44,795 and $161,602 |
San Diego | $883,981 | $64,298 and $235,455 |
San Francisco | $1,388,998 | $98,642 and $365,500 |
San Jose | $ | #VALUE! and #VALUE! |
Note: The low end of the cost to buy estimate range assumes a down payment of 3.5% and 20% for the high end. | ||
Finding an agent who is an expert in your area is one of the best ways to save money and get a great deal on your next home purchase.
Contact us at Clever for top agent recommendations.
How much do I need to buy a house in California?
The amount of cash you need to buy a house in California is determined mostly by the size of your down payment and the price of your home. The table below shows some estimates of how much money you need at various price points and common down payment percentages.
Home price | With 3.5% down payment | With 10% down payment | With 20% down payment |
|---|---|---|---|
$100,000 | $3,500 | $10,000 | $20,000 |
$250,000 | $8,750 | $25,000 | $50,000 |
$500,000 | $17,500 | $50,000 | $100,000 |
$750,000 | $26,250 | $75,000 | $150,000 |
Remember that the down payment is often the largest portion of your cost to buy a house, but it is not the only one.
Cost to buy a house in California calculator
For a more specific estimate of how much money you'll need for a certain house with a specific down payment, use our home buyer calculator below.
Ongoing costs of homeownership in California
Many buyers get so wrapped up in whether they can afford to buy a house or not, they forget to ask if they can afford to keep it.
Besides your mortgage payment, you also need to account for taxes, insurance, maintenance, repairs, and possibly upgrades. There can be quite a range for most of those expenses, but most experts recommend earmarking one percent of your home's value for maintenance and repairs.
» MORE: The true cost of home ownership
Expense | Average monthly cost |
|---|---|
Mortgage (principle and interest) | $3,503 |
Homeowners insurance | $148 |
Taxes | Varies by county, but averages $476 statewide |
Maintenance | $640 |
Utilities | $400 |
Total | $5,165 |
Note: All numbers are estimates based on state averages and a median home value of $769,405 and assume a down payment of 20% | |
Another expense to consider is homeowner's association (HOA) fees. The majority of homeowners in California actually belong to an HOA of some kind, so there's a decent chance you'll need to budget for this as well.
The national average for HOA fees is about $250 per month, but this can vary significantly depending on your neighborhood and city.
Also, if your down payment is less than 20%, your lender may require you to pay for private mortgage insurance (PMI). This will be added to your monthly mortgage payment and typically costs $335 to $1,133 per month until you've accrued enough equity.
Top ways to save money when buying a house in California
There's no getting around the fact that buying a house is going to cost you some money. But there are some useful strategies for minimizing the cost and keeping some of that money in your pocket.
Look into better financing options
Since your mortgage payment makes up the majority of your monthly homeownership cost in most cases, a great way to bring this down is to get a lower interest rate.
The average homeowner in California pays 5.42% on a 30-year, fixed rate mortgage. The lower your interest rate, the more money you can save over the life of your loan.
Making sure your credit score is top notch and shopping around for a great lender are some of the best ways to ensure you get the best rate available to you.
Get Pre-approved Today!
Get matched with a lender who can tell you how much house you can afford. To get started, where do you plan on buying?
You could also look into no closing cost loans if you're more concerned about the up-front cost, but these tend to come with a higher interest rate and cost you more in the long run.
» MORE: Other considerations for saving money when buying a home
Participate in home buyer programs California
California has a number of programs (e.g., HELP, MIPA) to help with the home buying process. Most of these either come in the form of down payment assistance or more favorable lending terms.
There are also programs that focus on helping specific demographics, such as veterans, people with disabilities, low-income borrowers, and more.
» MORE: A guide to first-time home buyer programs in California
Partner with an expert agent offering cash back
Some real estate companies, like Clever, offer home buyers a percentage of their home's price back after the sale finalizes.
That means if you work with a Clever agent, you'll not only get the expertise that helps you get the best deal possible — you could also get up to 0.5% of your home price back after closing!
FAQs
The cost to buy a house varies widely depending on the sale price and down payment size. That said, the median home value in California is $769,405, and the average home buyer in California spends between $56,729 and $206,212 during the home purchase process.
Lenders generally recommend having a debt-to-income ratio — that is, your debt divided by your income — of no more than 36–43%. For an average California mortgage of $3,503, you'd need to make at least $8,146 to $9,729 per month to afford that, not counting other debts. Carrying debt for things like credit cards, car loans, or student debt will make this number go up.
The only way to know for sure if you're better off buying than renting is to compare a specific home with the cost to rent a comparable home in your area, which a home cost calculator can help with. Generally speaking, the more expensive the real estate market, the less financial benefit there is to buying versus renting, at least when comparing monthly expenses. Ultimately, you need to decide how much money you need to save owning a home to make it worth the extra hassle and risk of the home value going down.
Related links
ACgov.org. "Documentary Transfer Tax." Accessed Sept 15, 2022. Updated Jan 1, 2022.