After mortgage costs increased, a 32-year-old abandoned the idea of purchasing a home in LA; even a small condo now costs nearly $1 million.

In 2023, when Jonathan Ochart relocated from San Antonio to Los Angeles to expand his public relations business, he planned to purchase a condo.

He tells CNBC Make It that he wants a one-bedroom apartment with a size of 600 to 700 square feet, with no frills.

Ochart is a homeowner who bought a detached, two-bedroom house in San Antonio for $275,000 in 2021. He now rents out the property. However, keeping the Texas property prevents him from relying on proceeds from a sale to purchase another home. This, combined with other factors, makes it difficult for him to afford a home in Los Angeles County, even for a smaller property.

"A modest condo in LA can cost nearly $1 million," he remarks.

Significant trade-offs were made in the listings within Ochart's $450,000 budget, such as being located far from his preferred neighborhoods, requiring extensive renovations, or having steep homeowners association fees due to special assessments for repairs.

By early 2024, Ochart abandoned the idea of purchasing a condo in Los Angeles due to mortgage rates being around 8%, which would have resulted in monthly payments ranging from $3,500 to $4,000, which was beyond his comfort level.

If you don't love the space or the neighborhood, it doesn't make sense to spend all that money you've worked hard to save.

I pay half the amount renting here that I would buy in a place," he says. "So it just makes more sense to rent.

Many young professionals, like Ochart, face the challenge of affording homeownership in major metro areas due to high housing costs, despite the numerous career opportunities, higher salaries, and diverse lifestyle options offered by these cities.

Due to the high cost of living in many cities, many people are forced to choose between renting or relocating to more affordable areas, which may be far from their jobs.

Homes in big U.S. cities only seem affordable to the wealthiest Americans

In major cities such as LA, San Jose, New York, and Boston, the median-priced homes are sold closer to $1 million than the national median of $412,300. In LA County, the median home price is approximately $960,000, which is about 14 times the median annual household income for the county, according to the latest data from the U.S. Census Bureau.

Many young professionals in LA struggle with student loan debt and low income, making it difficult for them to afford a 10% down payment of $96,000. Without financial assistance from their families or inheritance, they are more likely to rent than buy a home.

"According to Ochart, it is difficult for the average millennial to purchase any property in LA County due to the high prices. While smaller cities may offer more affordable housing options, once an individual moves to a larger city with greater job prospects, they are no longer able to afford the housing."

If mortgage rates decrease to pandemic levels, Ochart would consider buying a home in Los Angeles.

Instead of spending extra money on a mortgage, he uses that money for retirement or other investments.

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