To buy a median-priced single-family home in Santa Clara County, you need a household income of about $510,800 a year, according to the California Association of REALTORS® Housing Affordability Index for the second quarter of 2026. That figure assumes a $2,050,000 median price and a monthly payment of $12,770. Only 22% of households in the county could afford that home, which tells you a lot about who is buying here right now.
I see this firsthand. The three first-time buyers I worked with this year were all tech employees who had lived here for years, and they bought at an average of about $2.5 million. After 23+ years and 460+ transactions in Silicon Valley, I can tell you the number on your offer letter is only part of the story. Here’s what it really takes, with the math laid out so you can check it.
Key Takeaways
Income Needed by Price, at Today’s Rates
C.A.R.’s figure used a 6.54% rate. Rates have moved since then, and Freddie Mac’s Primary Mortgage Market Survey showed a 7.40% average 30-year fixed rate the week of October 8, 2026, up from 6.30% a year earlier. Using that rate, 20% down, property tax of about 1.15%, an insurance estimate, and the same rule C.A.R. uses (housing costs at no more than 30% of gross income), here is what different price points require.
| Purchase price | Loan (80%) | Monthly payment (PITI) | Income needed |
|---|---|---|---|
| $1,500,000 | $1,200,000 | $9,996 | about $400,000 |
| $2,000,000 | $1,600,000 | $13,245 | about $530,000 |
| $2,500,000 | $2,000,000 | $16,493 | about $660,000 |
| $3,000,000 | $2,400,000 | $19,825 | about $793,000 |
| $3,500,000 | $2,800,000 | $23,074 | about $923,000 |
A quick rule of thumb from this table is that you need roughly $26,000 to $27,000 of household income for every $100,000 of purchase price at current rates. You can test your own scenario on my affordability calculator or mortgage calculator.
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How Much Rates Change the Income You Need
Rates matter almost as much as price. On the same $2.5 million home, here’s how the income needed shifts as the 30-year rate moves, holding everything else equal.
| 30-year fixed rate | Monthly payment (PITI) | Income needed |
|---|---|---|
| 6.30% (the rate a year ago) | $15,025 | about $601,000 |
| 6.54% (C.A.R.’s Q2 2026 assumption) | $15,340 | about $614,000 |
| 7.40% (Freddie Mac, October 8, 2026) | $16,493 | about $660,000 |
| 8.40% | $17,883 | about $715,000 |
In other words, the same house takes about $59,000 more income to buy today than it did a year ago, without the price changing at all. This is why I tell buyers to get pre-approved again whenever rates move, and why some of my clients look at an adjustable-rate loan. My post on fixed versus adjustable rate mortgages walks through that trade-off, and if rates fall after you buy, you can refinance.
Why Lenders May Approve You for More Than This
The 30% rule is a comfort guideline, not a legal limit. Lenders look at your total debt-to-income ratio, which the CFPB defines as all monthly debt payments divided by gross monthly income, and limits vary by lender and loan type. The CFPB’s 2020 qualified mortgage rule replaced the old hard 43% cap with a price-based test, so there is no single magic ratio anymore.
What that means in practice is that a lender might approve you well above my table. Whether you should borrow that much is a separate question. I’d rather my clients buy at a payment that still lets them save, travel and sleep at night. My posts on the underwriting process in Silicon Valley and what credit score you need for a mortgage explain what else lenders weigh.
How Your RSUs and Bonus Count Toward That Income
For tech buyers, base salary is often only part of the picture. Fannie Mae’s Selling Guide section B3-3.3-07 allows lenders to count vested RSU income, generally with at least 12 months of history at your current employer for time-based awards. The income is usually calculated using a 200-day moving average stock price applied to the shares that vested over the past 24 months, and sign-on grants don’t count.
At these price points your loan will be a jumbo, because it’s above the FHFA’s 2026 high-cost conforming limit of $1,249,125. Jumbo lenders write their own guidelines, so one lender may count your RSUs fully while another discounts them. Shopping lenders who understand tech compensation can change your buying power by hundreds of thousands of dollars. I cover the details in Should I Sell My RSUs to Buy a House in Silicon Valley?
How That Compares to Typical Bay Area Incomes
The gap between what it takes and what most people earn is wide. The median household income in Santa Clara County was $164,281 in the Census Bureau’s American Community Survey for 2020 to 2024. California’s Department of Housing and Community Development set the county’s 2026 area median income at $205,500 for a family of four in its official income limits.
That’s why so many buyers in this price range are dual-income tech households. In my experience, two senior engineers, or a director with a working spouse, can clear $600,000 once RSUs are included. It also means most government first-time buyer programs won’t apply, because they’re built around those same income limits, and the county’s moderate-income limit for a family of four is $246,600. If your household is closer to the county median, condos and townhomes are the more realistic path, and my post on 7 signs you’re ready to stop renting is a good starting point.
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The Cash You Need, Not Just the Income
Income gets you approved, but cash gets you the keys. On a $2.5 million home, 20% down is $500,000, and jumbo lenders typically want to see reserves left over after closing. You’ll also pay closing costs, including transfer taxes.
Santa Clara County’s documentary transfer tax is $1.10 per $1,000, and San Jose, Mountain View and Palo Alto each add $3.30 per $1,000, per the County Clerk-Recorder. In San Jose, homes selling between $2.3 million and $5 million also carry Measure E’s 0.75% tax on the full price, as the County explains here. Who pays what is negotiable, but you should know these numbers before you make an offer. If your down payment is coming from company stock, plan the sale and the tax on it before you start writing offers.
Costs That Keep Going After You Buy
Property tax under Prop 13 starts at 1% of your purchase price plus local voter-approved charges, and the assessed value can rise no more than 2% a year while you own the home, per the California Board of Equalization. On a $2.5 million home, plan on roughly $28,000 to $30,000 a year. Check the actual tax bill for any home you’re considering through the Santa Clara County Tax Collector, because special assessments vary a lot by neighborhood.
You’ll also want a maintenance budget, especially for the mid-century homes common in Sunnyvale, Mountain View and Santa Clara. Insurance is another line item that’s grown. Standard California homeowner’s policies don’t cover earthquakes, so price a separate earthquake policy before you commit to a number.
Tax benefits are smaller than many buyers assume. Mortgage interest is deductible only on the first $750,000 of acquisition debt under IRS Publication 936, and the 2026 state and local tax deduction cap of $40,400 phases down to $10,000 for higher earners, per IRS Publication 6079. My post on the tax benefits of owning a home in San Jose walks through the rest.
What You Can Buy at Each Price Point
In my experience, the budget you set shapes the neighborhood more than anything else. Around $1.5 million to $2 million, buyers often look at parts of San Jose, Campbell and Santa Clara. At $2.5 million and up, more of Cupertino, Saratoga, Los Gatos and West San Jose opens up, along with the school districts many tech families want.
School boundaries don’t always follow city lines, so verify the district for every address. My six steps for choosing a school district will save you from a costly surprise. You can explore every area on my Silicon Valley neighborhoods page.
Is It Still Worth Stretching to Buy?
That depends mostly on how long you plan to stay. I ran the full rent versus buy math for a $2.5 million home in Is It Worth Buying a House in the Bay Area?, and the short version is that owners tend to come out ahead after about seven to ten years. If you’d like a clear plan, start with my Silicon Valley Home Buyer Guide and get pre-approved with a lender who understands RSUs.
When you’re ready to compete, my guides on winning offers and preemptive offers explain how the best homes actually sell. You can also see how I work with buyers and read what my clients say.
How I Ran These Numbers
All payment figures assume a 30-year fixed loan, 20% down, property tax of 1.15% and $3,000 to $4,000 a year for insurance, with housing costs at 30% of gross income, the same ratio C.A.R. uses in its affordability index. Rates come from Freddie Mac’s weekly survey, and every source was checked on October 11, 2026. I’ll update this article as rates and prices change.
Free Buyer Strategy Call
Before you tour a single home, let's build your game plan.
In Silicon Valley, the buyers who win usually aren't the ones with the biggest offer. They're the ones who knew exactly how they'd compete before the right house ever came up. In 30 minutes we'll talk through your timing, how your down payment and equity comp fit together, and which neighborhoods really match the way you live, then put together a plan to win the home you want without overpaying for it.
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Frequently Asked Questions
What salary do you need to buy a house in San Jose?
For a median-priced home in Santa Clara County, C.A.R. estimated about $510,800 in household income in Q2 2026. At today’s 7.40% rate and a $2.5 million price, it’s closer to $660,000.
Can I buy a house in the Bay Area making $200,000?
It’s very difficult for a single-family home in Santa Clara County without significant help on the down payment. Condos, townhomes and nearby areas are more realistic at that income.
How much house can I afford making $500,000 in Silicon Valley?
At a 7.40% rate with 20% down and housing costs at 30% of income, about $1.9 million. A lender may approve more, but that’s the level C.A.R.’s affordability math supports.
Do lenders count RSUs and bonuses?
Usually, if you have enough history. Fannie Mae generally wants at least 12 months with your current employer for time-based RSUs, and jumbo lenders set their own rules.
How much do I need for a down payment on a $2.5 million house?
Plan on $500,000 for 20% down, plus closing costs, transfer taxes and several months of reserves.
Do first-time buyer programs help in Santa Clara County?
Rarely at these prices. Most programs use income limits based on area median income, and Santa Clara County’s 2026 moderate-income limit for a family of four is $246,600.
This article is general information and not financial or lending advice. Your lender will make the final call on what you qualify for. Last updated October 11, 2026.
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