(Just The News)—The monthly payment to purchase an entry-level California home has risen 88% since 2020, according to a new report from the non-partisan, state-funded Legislative Analyst’s Office. With the ongoing wildfires having destroyed over 10,000 buildings in high-income areas, prices are primed to go up even further as wealthy families seek new shelter.
“Payments for a mid-tier home were nearly $5,800 a month in December 2024 – an 84% increase since January 2020. Payments for a bottom-tier home were over $3,500 per month – an 88% increase since January 2020,” wrote the LAO. “This rapid increase in monthly costs for homebuyers was driven by higher home prices and increasing mortgage rates.”
The LAO also notes that home prices dropped briefly early in the pandemic during 2020; rising prices spurred by low interest rates drive home payments to rise even as rates remained steady, with rate increases starting in 2022 making financing those higher purchase prices even more expensive.
The LAO says that this rapid increase in mortgage rates from 3% before 2022 to 7% now means that many homeowners can’t afford to move, even if they wanted to, thus putting further pressure on housing prices as fewer homeowners decide to sell.
“For example, if a homeowner with a mortgage rate of 5 percent sold their home and bought a new similarly-priced home at current interest rates, they would have monthly payments approximately 18 percent higher. For the typical homeowners, this amounts to over $300,000 more in payments over the life of a 30-year loan. As a result, many are choosing to stay put, significantly limiting the number of homes available for sale in the state’s tight housing market,” the LAO wrote.
“81 percent of California homeowners currently have mortgage rates below 5 percent, while new buyers face the much higher 7 percent rate,” the LAO wrote. “If a homeowner with a mortgage rate of 5 percent sold their home and bought a new similarly-priced home at current interest rates, they would have monthly payments approximately 18 percent higher. For the typical homeowners, this amounts to over $300,000 more in payments over the life of a 30-year loan.”
“As a result, many are choosing to stay put, significantly limiting the number of homes available for sale in the state’s tight housing market,” continued the LAO.
With over 12,000 buildings now destroyed by the ongoing fires – concentrated in wealthier areas such as the Pacific Palisades where the median home for sale before the fire cost $4.6 million – prices are already spiking as high-income families try to get temporary housing while their homes are rebuilt, or move somewhere new entirely.
The City of Los Angeles permitted just 8,706 new homes in 2024, down from 11,311 in 2023, and 15,295 in 2022, meaning the wildfires could decrease the city’s overall housing supply as building slows.
Hilgard Analytics’s 2024 report on residential permitting in Los Angeles blamed high interest rates and the city’s new transfer tax on all property over $5 million for the recent decline.
“Persistently high interest rates, coupled with negative externalities from Measure ULA, discouraged developers from taking on the financial risks of new projects,” wrote urban planner Joshua Baum in the report.
The Biggest Threat to Your Retirement Is Actually a Very Good Thing
When you look at the headlines today, you’ll see experts in the retirement industry warning about big threats to your financial security:
- De-dollarization and the rise of BRICS
- Soaring national debt
- Unstable interest rates
- Weakened U.S. dollar
All of these are real concerns. But they aren’t the biggest threat to your retirement savings. The true risk isn’t political, monetary, or global.
It’s longevity.
Why Longevity Is the Silent Threat
For most of human history, the problem was the opposite — life expectancy was short, and few people even reached retirement. Today, thanks to medical advancements, healthier lifestyles, and better living conditions, people are living longer than ever before.
And while that’s a wonderful thing, it comes with a financial catch: Your retirement account has to last far longer than you might expect.
- A 65-year-old couple today has a 50% chance that one of them will live to 90.
- Some projections suggest that many of us will live well into our 90s, even 100+.
- This means your nest egg may need to stretch not for 15 years, but 25, 30, or even 40 years.
That’s where the real danger lies: running out of money before you run out of life.
The Retirement Equation Has Changed
While market volatility, debt crises, or central bank policies may feel like the scariest threats, they’re temporary storms. Longevity, however, is a structural shift. Every extra year of life is another year of expenses, another year of inflation erosion, and another year of financial pressure.
If your retirement plan doesn’t account for longevity, you could face tough choices later in life — downsizing, working when you’d rather not, or becoming financially dependent on others.
How to Take Control
The good news? Longevity is a blessing — as long as you’re prepared for it. With the right planning, your retirement savings can work for you instead of against you. The key is learning how to protect your wealth, outpace inflation, and ensure your savings grow even as you live longer.
That’s why our friends at Augusta Precious Metals created a free resource to help you get started:
👉 Get Instant Access to the report, “How to Take Full Control of Your Financial Future”
This brief report will show you practical strategies to safeguard your retirement from the biggest threat of all — the one that comes from the gift of living longer.
Don’t let longevity catch you unprepared. Take the steps today to secure tomorrow.