CALIFORNIA STATE – California’s high cost of living is hardly a secret. But a new national ranking found that the Golden State is not merely one of America’s least affordable places to live — it is the least affordable of all.
California ranked No. 50 for affordability in WalletHub’s 2026 Best States to Live study, released August 10. It finished one spot below Hawaii, a state often regarded as the country’s standard-bearer for high prices.
That result may be the most surprising part of the study. Although California’s housing costs are notoriously steep, other cost-of-living rankings frequently place Hawaii ahead of it.
WalletHub reached a different conclusion after considering more than prices alone. Its affordability category incorporated housing affordability, median annual property taxes, overall cost of living, household income and the homeownership rate.
California’s Ranking Wasn’t Entirely Bleak
Affordability was one of five broad categories used to rank the states. WalletHub also examined their economies, education and health, quality of life and safety using 51 individual measurements.
California finished No. 31 overall with a score of 51.44 out of 100.
The state’s individual rankings reveal a dramatic split:
- No. 2 for quality of life
- No. 15 for economy
- No. 21 for education and health
- No. 38 for safety
- No. 50 for affordability
In other words, California scored as one of the country’s most desirable places to live — and simultaneously the hardest place for many households to afford.
Idaho claimed the study’s top overall position, followed by New Jersey, Wisconsin, Massachusetts and New Hampshire. New Mexico finished last overall.
The Housing Numbers Help Explain California’s Position
WalletHub’s ranking arrived just days after the California Association of Realtors released its second-quarter housing affordability report.
Only 19% of California households could afford the state’s $916,750 median-priced single-family home during the quarter. A household needed an estimated annual income of $228,400 to qualify, assuming a 20% down payment and a 6.54% mortgage rate.
The resulting monthly payment — including principal, interest, taxes and insurance — was approximately $5,710.
Nationally, 40% of households could afford the median-priced home of $434,900. The qualifying income was $108,400, less than half the amount required in California.
While statewide affordability improved slightly from 17% a year earlier, it fell from 22% during the first quarter of 2026. Affordability also declined from the previous quarter in 44 of the 53 California counties tracked by the association.
The Bay Area Is Even More Expensive
For Bay Area residents, the statewide figures may substantially understate the challenge.
The region’s median-priced home reached $1.42 million during the second quarter. Buyers needed an estimated annual income of $353,600 to afford the associated $8,840 monthly payment. Just 22% of Bay Area households met that threshold.
In Contra Costa County, 27% of households could afford the median-priced $920,000 home. The estimated qualifying income was $229,200.
Alameda County was considerably more expensive, with a $1.35 million median price and a qualifying income of $336,400. Only 22% of households could afford the typical home there.
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California’s Legislative Analyst’s Office has reached a similar conclusion about the longer-term trend. Its housing affordability tracker estimates that about 44% of California households could qualify for a mortgage on a bottom-tier home in 2026, down from roughly 57% in 2019.
For a mid-tier home, only about 22% would qualify.
The difference between renting and owning has widened as well. The office estimates that a two-bedroom California home now costs approximately $4,600 per month to own, compared with about $2,700 to rent — a 66% premium.
What the Ranking Actually Tells Us
All affordability rankings depend heavily on methodology. A list focused exclusively on consumer prices might place Hawaii last, while one measuring home prices against local incomes could produce another result.
WalletHub’s study combines several pressures facing residents: housing prices, taxes, everyday costs, income and the likelihood that households actually own their homes.
That broader approach pushed California to the bottom.
The study also captures the central contradiction facing the state. California remains extraordinarily attractive, scoring near the top for quality of life and relatively well for its economy. But increasingly, enjoying those advantages requires an income that many existing residents simply do not have.
