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Orange County: buying the median-priced home now takes about $285,000 a year in income, before insurance

By Dr. Hamid Rowshan, Choice of America

Orange County asking prices are lower than a year ago, but buying the median-priced home now takes a high household income, and homeowners insurance is another cost to price in before making an offer.

Orange County asking prices are lower than a year ago, but the monthly cost of buying is higher, and another cost is about to change on October 15. Realtor.com's September 2026 data put the county's median listing price at $1,287,500 (FRED MEDLISPRI6059), down from $1,377,500 in September 2025, a drop of about $90,000, or 6.5%. Over the same year, Freddie Mac's average 30-year fixed mortgage rate rose from 6.30% to 7.40% in the week of October 8, 2026 (FRED MORTGAGE30US), the highest weekly average since November 2023. It was 6.71% at the start of September and as low as 5.98% in late February. The next weekly reading is due October 15.

Here is what that does to a payment. As an illustration, a buyer putting 20% down on today's median, or $257,500, would borrow $1,030,000. At 7.40%, principal and interest on a 30-year fixed loan comes to about $7,132 a month. A year ago, 20% down on the $1,377,500 median at 6.30% would have meant a loan of $1,102,000 and a payment of about $6,821. So the median asking price is about $90,000 lower, but principal and interest is about $310 a month higher. At February's 5.98%, today's median would have cost about $6,162 a month, close to $970 less than now. A 15-year loan at Freddie Mac's 6.73% average would run about $9,103 a month. All of these figures leave out property taxes, homeowners insurance, HOA dues, and any special assessments.

Now set that against what Orange County households earn. The U.S. Census Bureau's QuickFacts puts the county's median household income at $116,289 (2020-2024 American Community Survey, in 2024 dollars), or about $9,691 a month before taxes. Principal and interest alone on the example loan would take about 74% of that. To keep principal and interest at 30% of gross income, a common affordability benchmark, a household would need about $285,000 a year, roughly 2.5 times the county median, and that is before taxes and insurance are added.

Renters face a steep step up. QuickFacts puts the county's median gross rent, which includes utilities, at $2,434 a month, about 25% of the median household's gross monthly income. The example payment of $7,132 is about 2.9 times that rent, a gap of about $4,700 a month. Put another way, a $2,434 monthly principal-and-interest payment at 7.40% would support a loan of only about $352,000, enough for a home priced around $439,000 with 20% down, or about 34% of the county's median asking price. Existing owners are in a very different position: the median homeowner with a mortgage pays $3,385 a month in total owner costs, which include the mortgage, taxes, insurance, and utilities, and 56.4% of the county's homes are owner-occupied.

Insurance is the next line in the budget to watch. The California Department of Insurance approved a 29.1% statewide average rate increase for the California FAIR Plan, the state's insurer of last resort, down from the 35.8% the FAIR Plan had requested. The new rates apply to new and renewal dwelling policies that take effect on or after October 15, 2026. The 29.1% is an average, not a flat increase: a FAIR Plan spokeswoman said the largest part of the increase relates to the wildfire portion of premiums, so properties at significant wildfire risk will see larger increases, and some policyholders will see a decrease. For buyers in canyon and hillside neighborhoods, from Laguna Beach and Laguna Niguel to Orange Park Acres, Silverado, Modjeska, Coto de Caza, and the edges of Yorba Linda and Anaheim Hills, an insurance quote belongs in the payment math before an offer goes in, not after.

The market itself is giving buyers more time and room. There were 4,735 active listings in September (FRED ACTLISCOU6059), about 4% more than a year earlier, and 2,114 new listings came on (FRED NEWLISCOU6059). Pending listings, homes with an accepted offer that had not yet closed, fell to 1,655 (FRED PENLISCOU6059) from 2,027 a year earlier, or about 35 homes in escrow for every 100 for sale. The median listing spent 53 days on the market (FRED MEDDAYONMAR6059). Realtor.com reports that 21.1% of Orange County listings had a price reduction in September, up from 17.4% a year earlier and the highest share among the five Southern California counties (San Diego 20.4%, San Bernardino 18.1%, Riverside 17.0%, Los Angeles 15.9%). Fewer than 1% of listings had a price increase. The median listing had 1,795 square feet, and the median asking price was $704 per square foot (FRED MEDLISPRIPERSQUFEE6059), down from $724 a year earlier.

What this means day to day: from Huntington Beach, Newport Beach, and Costa Mesa to Irvine, Tustin, and Santa Ana, and from Fullerton, Brea, Anaheim, and Garden Grove to Mission Viejo, San Clemente, and the Laguna communities, the numbers favor careful planning. Buyers should get a fresh pre-approval at today's rate rather than relying on one from the summer, and ask for insurance quotes early, especially if a home may need FAIR Plan coverage. With about one in five listings cutting price and homes taking close to two months to sell, buyers can ask for seller credits toward closing costs or a rate buydown, which can lower the monthly payment more than a small price cut. A condo or townhome can narrow the gap with renting, but compare HOA dues and the association's insurance coverage. The county's mean travel time to work is 26.7 minutes, so test the commute at rush hour on the 5, the 405, the 55, or the 91. Sellers should price close to recent comparable sales from the first day and have recent insurance and disclosure information ready, because buyers are measuring every listing against their full monthly budget.

At Choice of America, we help buyers, sellers, and renters across Orange County compare payments, insurance costs, neighborhoods, and trade-offs. Visit our Orange County page for local guidance, or call or text us to talk through your plans.

Choice of America · Orange County real estate

Dr. Hamid Rowshan, DRE #02004794, company DRE #02240008. Choice of America, serving Orange, Los Angeles, Riverside, San Bernardino, and San Diego counties. Call or text 833-THIS-BROKER, (833) 842-7465.

Payment figures are an illustration based on the median asking price, a 20% down payment, and Freddie Mac's average rates, principal and interest only; they are not a loan quote. Census income, owner-cost, and rent figures are 2020-2024 five-year averages and are not directly comparable to current listing data; the comparison is for context only. Insurance premiums vary by property; contact a licensed insurance agent or the California FAIR Plan for a quote.

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