Top 10 least affordable housing markets in the United States

Living in a big city is often an expensive affair. If you happen to live in California, things could be far more expensive than you expect. Though home prices remain affordable in most American cities, they are beyond the reach of most residents in California, according to real estate brokerage firm Redfin. Here we take a look at the top 10 least affordable housing markets in the United States. Seven of them happen to be in California.

Top 10 least affordable housing markets in the United States

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Ranking the least affordable housing markets

Redfin analyzed the housing market in 88 American cities (excluding New York City) to find out how affordable it is to buy a house across different cities. They concluded that housing is still within the reach of median income families in 68 of the 88 US metros. Redfin assumed that a home is affordable if it costs less than 30% of the gross median income.

The real-estate brokerage firm ranked cities based on the percentage of the local median household income needed to afford a median-priced home. The home affordability in a city depends on both the home prices and income of people. Ranking cities only on home prices without taking into account the income of people won’t provide the “entire picture of housing affordability,” says Redfin.

These are the ten least affordable housing markets in the country:

10- Boston, Massachusetts

Boston is home to reputed educational institutions like Harvard and MIT. It also has a strong technology sector. So, it’s no surprise that residential real estate in Boston is pretty expensive. According to Redfin, the median home price in the city is $545,000 and the median family income is $81,838. To be able to afford a house in Boston, a family would need an annual income of $101,899, which is 124.5% of the current median income.

9- Seattle, Washington

The median household income in Seattle is $77,269. But a family needs to be earnings 136.7% of that ($105,639, precisely) to be able to afford a median-priced home in the city. The median home price in Seattle is $565,000. The city is home to corporate heavyweights like Microsoft, Amazon, Boeing, and Starbucks. It has seen a rapid influx of new residents in the last few years due to growing job opportunities.

8- Oxnard, California

Oxnard in Ventura county is located close to Los Angeles. The median home price in Oxnard is $612,000. A family needs to be earning $114,426 per year to be able to afford a median-priced home. By comparison, the actual median household income in Oxnard is $81,972.

7- Honolulu, Hawaii

Honolulu is the 7th least affordable housing market in the United States. Almost everything is expensive in Honolulu. The Hawaiian city has a low unemployment rate of just 2.8%. The median home price in Honolulu is $619,500. You need an annual income of $115,828 to be able to buy a median-priced house on this Pacific island paradise. That’s 144.6% of the current median household income of $80,078.

6- Oakland, California

All of the top six least affordable housing markets in the US are located in California. According to Redfin, the median home price in Oakland is $750,000 and the median household income is $92,714. People’s income needs to go up by 151.2% to $140,228 for them to be able to afford a house.

5- San Diego, California

Home prices in San Diego are relatively lower than in other major Californian cities. But the median household income is also lower, which negates the effects of the lower home prices. A median house in San Diego costs $590,000. A family needs an annual income of $110,313 to be able to afford a median-priced house in the city. That’s 156.3% of San Diego’s median household income of $70,588.

4- Los Angeles, California

The city of glitz and glamor is one of the least affordable housing markets in the United States. The median household income in Los Angeles is $65,331 while the median home price is $650,000. According to Redfin, a family’s annual income has to jump 186% to $121,531 before they can afford to buy a median-priced house in the city.

3- San Jose, California

In San Jose, the median household income needs to more than double to $215,017 for a family to be able to afford a median-priced home. The median family income in San Jose is $105,809, which is pretty high but it’s not enough to afford a median home, which costs $1,150,000. The presence of Silicon Valley makes everything ridiculously expensive in San Jose.

2- Anaheim, California

Anaheim is part of the Los Angeles metropolitan area. Its median household income is $65,331, the same as Los Angeles. But a median home in Anaheim is more expensive at $725,000 compared to $650,000 in Los Angeles. Anaheim is home to the Disneyland. A median family needs to more than double their income to $135,554 per year to be able to afford a home.

1- San Francisco, California

The San Francisco Bay area is the least affordable housing market in the United States. In San Francisco, a “typical” family needs to almost triple their annual income to $265,000 to be able to afford a median-priced home. The median household income in the Bay area is $92,714. As of July 2019, the sale price of a median home is $1.42 million.




About the Author

Vikas Shukla
Although he has a background in finance and holds an MBA, Vikas Shukla is a technology reporter. He has a strong interest in gadgets, gizmos, and science. He writes regularly on these topics. - He can be contacted by email at vshukla@valuewalk.com