Why the American Dream Feels Out of Reach in San Jose – And How San Antonio Delivers It
The Stark Reality of Homeownership in San Jose, CA
In the heart of Silicon Valley, where innovation thrives and tech giants dominate the skyline, the reality of homeownership is becoming increasingly elusive for everyday families. A recent sale in San Jose highlights this stark truth: a modest 3-bedroom, 2-bathroom home built in 1959, spanning just 1,532 square feet on a 6,042-square-foot lot, fetched a staggering $1,830,000. This isn't an outlier—it's emblematic of the Bay Area's skyrocketing housing market, where median single-family home prices hover around $1.4 million.
Breaking Down the Costs in San Jose
Let's break down the numbers for this San Jose property. The buyers put down $1,280,000 and financed the remaining $550,000 with a 30-year fixed-rate mortgage at 6% interest. The monthly principal and interest payment alone comes to approximately $3,298. Adding in property taxes (around $22,872 annually, or $1,906 monthly) and homeowners insurance (estimated at $5,856 annually, or $488 monthly), the total principal, interest, taxes, and insurance (PITI) payment climbs to about $5,692 per month.
To afford this under standard lending guidelines—where housing costs should not exceed 28% of gross monthly income—a household would need a minimum annual income of roughly $244,000. Yet, the median household income in San Jose stands at $148,000. This means that even with a massive down payment, homeownership in a basic, dated property remains out of reach for the majority of residents. And remember, this PITI figure doesn't account for other essential expenses like food, entertainment, gasoline, utilities, or maintenance, which can easily add thousands more to monthly budgets.
Contrast this with the broader market: San Jose's median home price for a single-family residence is about $1.4 million, far exceeding what most families earning the median income can sustain. The result? A growing exodus of residents seeking more affordable, family-friendly alternatives without sacrificing quality of life.
A Better Option: What $550,000 in Financing Buys in San Antonio, TX
Now, imagine redirecting that same $550,000 mortgage to San Antonio, Texas—a vibrant city with a median single-family home price of around $295,000. Here, affordability meets opportunity. For this exercise, consider a scenario with a $138,000 down payment and the same $550,000, 30-year fixed-rate mortgage at 6% interest, allowing for a home purchase up to $688,000. But even at a slightly higher price point, the value is undeniable.
Take, for example, a brand-new home in Fair Oaks Ranch, a charming community just north of San Antonio known for its excellent schools, family-oriented vibe, and Hill Country scenery. A property like the one at 29510 Kearney Ridge—a 4-bedroom, 3.5-bathroom, 2,840-square-foot modern residence on a 0.34-acre lot—lists for $690,000. With the $550,000 mortgage (requiring approximately a $140,000 down payment in this case), you could secure this luxurious new build. Adjusting for our assumed $138,000 down payment scenario, similar properties in the $688,000 range offer even more upgrades, space, and amenities.
The PITI for a $690,000 home in San Antonio with the $550,000 mortgage? Principal and interest remain $3,298 monthly. Property taxes are estimated at $11,868 annually (or $989 monthly), reflecting Fair Oaks Ranch's effective rate of about 1.72%. Homeowners insurance, averaging around $4,637 annually (or $386 monthly) for a home of this value, accounts for Texas's weather considerations. Total PITI: approximately $4,673 per month—over $1,000 less than the San Jose equivalent, despite the larger, newer home.
This lower PITI requires a minimum household income of about $200,000 to meet the 28% guideline—still substantial, but far more attainable in a market where costs are balanced by no state income tax, lower overall living expenses, and abundant job opportunities in sectors like tech, healthcare, and military.
Comparing the Two Homes: A Tale of Two Markets
To illustrate the disparity, here's a side-by-side comparison of the San Jose property and the Fair Oaks Ranch example (a representative San Antonio-area home that could be acquired with similar financing):
| Metric |
San Jose, CA (Estrade Dr) 3bd/2ba • ~1,797 sq ft • 6,042 sq ft lot |
Fair Oaks Ranch, TX (29510 Kearney Ridge) 4bd/3.5ba • 2,840 sq ft • 0.34-acre lot |
|---|---|---|
| Purchase Price (for scenario) | $1,830,000 | $688,000 |
| Down Payment | $1,280,000 | $138,000 |
| Loan Amount / Terms | $550,000 · 6.00% · 30-yr fixed | $550,000 · 6.00% · 30-yr fixed |
| Monthly Principal & Interest (PI) | $3,297.53 | $3,297.53 |
| Estimated Annual Property Tax | ≈ $21,960 (≈1.2% of price) | ≈ $14,031 (≈2.039% of price; Bexar + City + Boerne ISD) |
| Estimated Annual Homeowners Insurance | ≈ $1,976 | ≈ $6,224 (scaled from SA average) |
| Monthly PITI | ≈ $5,292 | ≈ $4,985 |
| Minimum Household Income Needed (PITI ≤ 30%) | ≈ $211,700/yr | ≈ $199,400/yr |
| Local Median Household Income | $141,565 (San Jose — city) | $74,297 (San Antonio–New Braunfels MSA, 2023) |
| Notes & Assumptions: PI based on $550,000 @ 6.00% for 360 months (PI ≈ $3,297.53). San Jose tax modeled at ~1.2% of price. Fair Oaks Ranch composite ≈ 2.039% using 2024–2025 published rates. Insurance: CA uses 2025 statewide average; SA uses ~$2,714/yr for ~$300K dwelling scaled to ~$688K. Median household income: San Jose (city) from U.S. Census QuickFacts; San Antonio–New Braunfels MSA from ACS 2023. PITI excludes utilities, maintenance, HOA, food, fuel, childcare, and other living costs. | ||
Sources for the MSA income: DataUSA (ACS 2023 1-year) and Census Reporter (ACS 2023). Data USA+1
Why Families Should Consider Leaving San Jose for San Antonio
If you're raising a family in San Jose, the math simply doesn't add up. Between exorbitant housing costs, high state taxes, and a competitive market that favors the ultra-wealthy, many are left renting indefinitely or compromising on space and quality. But San Antonio offers a compelling alternative: a lower cost of living (with no state income tax saving you thousands annually), top-rated schools, family-friendly neighborhoods, and ample outdoor recreation in the Texas Hill Country.
Fair Oaks Ranch, in particular, blends small-town charm with big-city access—think excellent public schools, low crime rates, and communities designed for families, all within commuting distance to San Antonio's booming job market. Here, you can afford a home that supports your lifestyle: extra bedrooms for kids or a home office, a larger yard for play, and modern features without the renovation headaches of a 1950s build.
The exodus from California isn't just a trend—it's a smart financial move. With housing in San Jose pushing ownership beyond the reach of median earners, relocating to San Antonio isn't about settling; it's about thriving.
