The housing market may be cooling off, but many cities are still incredibly unaffordable for home buyers.
15 Most Expensive Housing Markets in the U.S.
The real estate market is beginning to show signs of cooling off, but the data shows some cities have a long way to go before the average person can afford a home.
According to RealtyHop’s housing affordability index, 79 of the 100 largest cities in the U.S. have a homeownership burden of 28% or higher, meaning the average family would have to spend 28% or more of their annual income on housing alone.
A common rule of thumb based on lender criteria states that your mortgage payment including principal, interest, taxes, and insurance should not be more than 28% of your gross income. In addition, your total debt payments should not exceed 36%.
The following list of cities exceeds that percentage by a wide margin, indicating that the housing affordability crisis is still in full swing.
See which cities made the list of the most unaffordable – you may be surprised at some of the top contenders.
#15 – San Jose, CA
Median Household Income: $122,914
Median Home Price: $1,100,000
Mortgage as % of Income: 56%
San Jose is in the heart of Silicon Valley. While median home prices topped an astronomical $1 million, the high median income in the area means things are a bit more affordable for the average homebuyer, though still double what experts recommend you spend on housing at 56% of total income.
#14 – Irvine, CA
Median Household Income: $117,904
Median Home Price: $1,075,000
Mortgage as % of Income: 58%
Irvine is located in the coveted Orange County area near San Diego. Median incomes are high, but so are home prices, making it one of the least affordable cities for homeownership.
#13 – Jersey City, NJ
Median Household Income: $78,098
Median Home Price: $650,000
Mortgage as % of Income: 59%
While Jersey City has a lower median home price than the previous two cities at $650,000, median household income is also much lower which affects affects affordability.
#12 – Boston, MA
Median Household Income: $79,797
Median Home Price: $775,000
Mortgage as % of Income: 59%
Boston’s median home price of $775,000 makes it hard to afford a home in this city with an average income just under $80,000.
#11 – Oakland, CA
Median Household Income: $82,649
Median Home Price: $798,000
Mortgage as % of Income: 61%
While Oakland has more affordable housing than nearby San Francisco, median incomes are also lower. The average family would spend 61% of their income on housing here.
#10 – Santa Ana, CA
Median Household Income: $74,185
Median Home Price: $750,000
Mortgage as % of Income: 62%
Another Orange County city makes the list. At $750,000, the average homeowner would pay a whopping 62% of their income just on mortgage payments.
#9 – Anaheim, CA
Median Household Income: $80,486
Median Home Price: $834,250
Mortgage as % of Income: 64%
Home to Disneyland, Anaheim is located in the heart of the Los Angeles area. Its desirability means that housing prices are sky-high.
#8 – San Diego, CA
Median Household Income: $89,357
Median Home Price: $950,000
Mortgage as % of Income: 66%
No your eyes aren’t deceiving you, there’s a distinct trend. Coastal California cities dominate the list of least affordable housing in the entire country.
#7 – San Francisco, CA
Median Household Income: $126,117
Median Home Price: $1,388,000
Mortgage as % of Income: 67%
San Francisco has the highest median home prices in country at almost $1.4 million. A high median income helps offset affordability somewhat, but the average homeowner would still be putting 67% of their paycheck toward a mortgage.
#6 – Long Beach, CA
Median Household Income: $70,677
Median Home Price: $799,000
Mortgage as % of Income: $70%
Long Beach has beautiful beaches, but you pay the price in housing affordability. This average income earner in this city would have to fork over 70% of their paycheck to afford a home.
#5 – Hialeah, FL
Median Household Income: $40,036
Median Home Price: $465,000
Mortgage as % of Income: 73%
Hialeah is the largest suburb of Miami. While housing prices are a relatively tame $465,000, median household income is also low at $40,000 per year.
#4 – Newark, NJ
Median Household Income: $38,854
Median Home Price: $385,000
Mortgage as % of Income: 78%
Coming in at the fourth least affordable city in the U.S., Newark is a suburb of New York City. The median homeowner would have to shell out 78% of their income to afford a house.
#3 – New York, NY
Median Household Income: $68,129
Median Home Price: $925,000
Mortgage as % of Income: 82%
Surprisingly, New York City median home prices come in lower than some other cities on the list, but median income is also lower, putting homeownership out of reach for a majority of buyers.
#2 – Los Angeles, CA
Median Household Income: $69,695
Median Home Price: $975,000
Mortgage as % of Income: 85%
Los Angeles comes in at number two in the U.S. and number one in California on the list of least affordable housing markets.
#1 – Miami, FL
Median Household Income: $44,581
Median Home Price: $610,000
Mortgage as % of Income: 87%
While most people would probably assume New York or maybe San Francisco would be the least affordable city in the U.S., surprisingly Miami takes the prize. While median home prices are less than half that of San Francisco, median income is even lower. For the average homeowner, after paying the mortgage, less than $500 a month would be left to pay for everything else.
Andrew Herrig is a finance expert and money nerd and the founder of Wealthy Nickel, where he writes about personal finance, side hustles, and entrepreneurship. As an avid real estate investor and owner of multiple businesses, he has a passion for helping others build wealth and shares his own family’s journey on his blog.
Andrew holds a Masters of Science in Economics from the University of Texas at Dallas and a Bachelors of Science in Electrical Engineering from Texas A&M University. He has worked as a financial analyst and accountant in many aspects of the financial world.
Andrew’s expert financial advice has been featured on CNBC, Entrepreneur, Fox News, GOBankingRates, MSN, and more.
