Why Affordability Is a Challenge in California
Buying your first home in California can feel overwhelming. Home prices are some of the highest in the country, and mortgage rates have increased in recent years. But not every city in California is out of reach. Some areas still offer affordable options, especially for first-time buyers who are flexible about location.
At LBC Mortgage, we help clients understand the market, explore the best locations, and find mortgage solutions tailored to their needs. Whether you're looking to settle in the Central Valley, the Inland Empire, or a smaller city with lower prices, we make sure you have the right information to make a smart purchase.
Home prices keep climbing
California’s housing market continues to challenge first-time buyers. As of late 2025, the statewide median home price is around $899,000. In many parts of Los Angeles, Orange County, and the Bay Area, home prices are well over $1 million. This makes homeownership feel out of reach for many, especially those buying without significant savings or family assistance.
Mortgage rates affect monthly payments
Higher mortgage rates mean higher monthly payments. Even a small change in rates can raise your payment by hundreds of dollars each month. In today’s market, buyers need to think not only about the home’s price but also the long-term cost of financing.
Income and home prices don’t match
One of the biggest barriers is the gap between wages and home prices. In many California cities, median income doesn’t support the cost of owning a home without taking on significant debt. That’s why choosing the right location can make all the difference.
Where First-Time Buyers Can Still Find Value
Some California cities still offer a good mix of price, mortgage accessibility, and long-term livability. These locations may not have the buzz of coastal cities, but they offer something more important: a realistic path to homeownership.
Fresno
Fresno stands out as one of the most affordable large cities in California. Located in the Central Valley, Fresno offers median home prices that are significantly lower than the state average. Buyers can expect to pay around $375,000 to $450,000 for a starter home—less than half the cost of homes in many other parts of the state.
Fresno also offers steady job growth, a low cost of living, and access to schools and public services. First-time buyers often find that they can purchase a single-family home instead of settling for a condo or townhouse, which is common in more expensive areas.
Bakersfield
Bakersfield is another Central Valley city that continues to attract first-time buyers. With home prices hovering around $350,000, this area remains accessible for people with moderate incomes. It’s a great option for families or individuals looking to stretch their housing dollar further.
Bakersfield also has a strong local economy, particularly in energy and agriculture. Commute times are reasonable, and many neighborhoods offer larger lot sizes compared to what you'd find in major metro areas.
Madera, Tulare, and Porterville
Smaller cities like Madera, Tulare, and Porterville offer some of the lowest home prices in California. These locations don’t often make the headlines, but they provide real opportunities for buyers who prioritize affordability.
In Madera, you can find starter homes for under $350,000. Tulare and Porterville are even more budget-friendly, with many listings under $300,000. These cities are great for buyers willing to trade big-city amenities for a more relaxed lifestyle and lower cost of living.
Yuba City and Other Inland Cities
Yuba City, located north of Sacramento, offers affordable housing and a quieter pace of life. It’s part of a growing trend: more buyers are choosing inland areas where their income can go further. The same is true for cities like Merced, Modesto, and Chico, which combine lower prices with decent access to jobs, schools, and transportation.
What to Watch Out For When Buying in a "Cheaper" City
Lower prices don’t always mean better value. It’s important to consider the full cost of homeownership and how the local market supports long-term stability.
Mortgage rates and affordability
Even in affordable cities, interest rates can impact your budget. A lower home price won’t help much if your mortgage rate drives up your monthly payment. That’s where we come in. At LBC Mortgage, we compare mortgage options and rates to find the best fit for your goals, whether that’s a fixed-rate loan or something more flexible.
Local job markets
Before buying, consider the strength of the local job market. Some lower-cost areas may have limited employment opportunities, which can affect your financial security. We help buyers factor this into their planning so they aren’t caught off guard after moving.
Property taxes and insurance
Even in areas with low home prices, high property taxes or insurance premiums can raise your overall housing costs. Some areas of California face wildfire risk, which can increase insurance rates. We make sure our clients understand the full picture—including costs that lenders may not always highlight.
How LBC Mortgage Helps First-Time Buyers Succeed
We know that every buyer’s situation is different. That’s why we offer personalized mortgage advice based on your income, goals, and the city where you plan to buy. Our team takes the time to walk you through loan options, down payment assistance programs, and long-term budgeting strategies.
Local market expertise
We understand California’s diverse housing markets, from Fresno to Riverside to small inland cities. Whether you’re considering a starter home in Bakersfield or a townhouse in Modesto, we help you understand what your money can buy and how to make the most of it.
Mortgage strategies tailored to you
We don’t push one-size-fits-all loans. Instead, we explore different mortgage programs to find the one that works best for your financial situation. That includes FHA, conventional, VA, and even bank statement loans for self-employed buyers. With our help, first-time buyers can get into homes they might not have thought were possible.
Support every step of the way
From pre-approval to closing day, we’re by your side. We explain every step in plain language, answer your questions quickly, and help you stay competitive in today’s fast-moving market. Our goal is to make buying your first home feel less stressful—and more successful.
