The Majority of Mortgaged Homes in California were of High-Income Households
By: Ramu Garuda May. 04, 2018
The majority of mortgaged homes in California are of households that have an annual income of over $100,000. Households in this income bracket were also the only ones to witness an increase in mortgages from 2009 to 2016, while there was a decrease in homes of lesser household income levels being mortgaged during the same period.
This information comes from a recent study by Gavop that used data from the U.S. Census Bureau to analyze county-level real estate trends in California. The data shows that as of 2016, 52.39 percent of households that had an annual income of over $100,000 had a mortgaged home, which is an increase from 43.1 percent in 2009. The following table shows how these high-income mortgaged homes compare to lower-income households’ mortgages at both the state and national levels.
Percent of Mortgaged Homes by Household Income in 2009 & 2016
| Location | <$50,000 in 2009 | $50,000
$100,000 in 2009 | >$100,000 in 2009 | <$50,000 in 2016 | $50,000
$100,000 in 2016 | >$100,000 in 2016 |
|---|---|---|---|---|---|---|
| California | 22.52% | 34.39% | 43.1% | 18.67% | 28.94% | 52.39% |
| U.S. | 29.16% | 38.81% | 32.02% | 23.38% | 34.52% | 42.1% |
The table shows how the percentage of mortgaged homes varies by level of household income—clearly, households with a high income are most likely to have a mortgage. Additionally, California follows the national trend of a decrease in the proportion of mortgaged homes for households with an annual income of less than $50,000 and $50,000–$100,000.
In California's top three most populated counties, over half of all homes with a household income more than $100,000 had a mortgage. In Los Angeles County, 51.84 percent of homes mortgaged had an annual income of >$100,000 followed by 55.57 percent in San Diego County and 61.97 percent in Orange County.
Furthermore, Sutter County experienced the highest increase in mortgaged homes from 2009 to 2016 with a 40.92 percent increase. As seen in the following graph, the second to highest was in from Butte County at 38.23 percent, followed by Merced County at 33.6 percent, Placer County at 30.3 percent, and Humboldt County at 30.19 percent.
Another reason for an increase in mortgages in these counties is perhaps improvements in the housing market since 2009. In comparison, counties with the greatest change in percentage of mortgaged homes with incomes between $50,000–$100,000 ranged between 0.5 and 21.92 percent, while the range was -3.57 to 11.93 percent for households with an annual income of under $50,000.
ABOUT THE AUTHOR
Ramu Garuda
Ramu is a research analyst with over 9 years of analytics & research experience. Prior to joining the company, he worked with some of the prominent consulting and market research firms in India, including Pride Technology (Supporting consulting projects to PWC), RR Donnelly, and The Hackett Group. His skills include company profiling, benchmarking, data and trend analysis, industry analysis, and report writing across the industries. Ramu holds a Master’s degree in Finance and Marketing. He also has a bachelor’s degree in Biotechnology.
