California is the worst state for first-time homebuyers — the staggering amount you need to pay
California’s San Jose, Los Angeles, and San Francisco metros rank among the worst in the U.S. for first-time homebuyers, with FHA loans making up just 2.8% to 11.2% of total loans and median property values exceeding $700,000. Even more affordable regions like Visalia and Bakersfield require median incomes of $100,000+ for loans over $375,000, far surpassing Texas’s top metro, McAllen, where FHA loans dominate at 54.2% with lower entry costs.
California dominates the list of worst U.S. metros for first-time homebuyers, according to an analysis of 2025 Home Mortgage Disclosure Act data by This First Home. San Jose-Sunnyvale-Santa Clara ranks last among 150 metros, with only 2.8% of loans from the Federal Housing Administration (FHA), which typically serves first-time buyers. The median FHA borrower in San Jose earns $193,500, takes out a $735,000 loan, and buys a home worth $785,000. Los Angeles-Long Beach-Anaheim follows closely, with FHA loans at just 11.2% of total loans, while San Francisco-Oakland-Berkeley sees only 5.8% FHA participation. Median incomes for FHA borrowers in LA and San Francisco are $167,000 and $169,000, respectively, with loan amounts exceeding $600,000. More affordable California markets like Visalia and Bakersfield-Delano offer slightly better prospects, ranking third and sixth nationally for FHA loan share (45.5% and 40.3%). However, median incomes there still reach $100,000–$102,000 for loans of $375,000, with property values near $385,000. By contrast, Texas’s McAllen-Edinburg-Mission metro leads the nation for first-time buyers, with FHA loans accounting for 54.2% of total loans. There, median borrower income is $89,000, and loan amounts average $245,000—less than half the median income required in San Jose. The data underscores California’s steep homebuying barriers compared to more accessible markets nationwide.
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