The housing market may be cooling down, but many cities are still incredibly inaccessible to homebuyers.
15 most expensive housing markets in the US
The real estate market is starting to show signs of cooling, but data shows some cities have a long way to go before the average person can afford a home.
According to the RealtyHop Housing Affordability Index, 79 of the 100 largest US cities have a homeownership burden of 28% or higher, meaning the average family will need to spend 28% or more of their annual income on housing alone.
The general rule of thumb, based on lender criteria, is that your mortgage payment, including principal, interest, taxes, and insurance, should not exceed 28% of your gross income. In addition, the total amount of debt payments should not exceed 36%.
The following list of cities significantly exceeds this percentage, indicating that the housing affordability crisis is still in full swing.
Take a look at which cities made the list of the most inaccessible – you might be surprised to see some of the top contenders.
No. 15 – San Jose, California.
Median household income: $122,914
Average house price: $1,100,000
Mortgages as % of income: 56%
San Jose is in the heart of Silicon Valley. While median home prices have topped an astronomical $1 million, the area’s high median income means things are slightly more affordable for the average homebuyer, though still double what experts recommend spending on housing at 56% of the total. income.
No. 14 – Irvine, California.
Median household income: $117,904
Median house price: $1,075,000
Mortgages as % of income: 58%
Irvine is located in a coveted area of Orange County near San Diego. Median incomes are high, as are home prices, making it one of the least affordable cities to buy a home.
No. 13 – Jersey City, New Jersey.
Median household income: $78,098.
Median house 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, the median household income is also much lower, affecting affordability.
#12 – Boston, Massachusetts
Median household income: $79,797
Median house price: $775,000
Mortgage as % of income: 59%
The median home price in Boston is $775,000, making it hard to afford a home in this city with an average income of just under $80,000.
#11 – Oakland, California
Median household income: $82,649
Median house price: $798,000
Mortgages as % of income: 61%
Although Oakland has more affordable housing than neighboring San Francisco, the median income is also lower. The average family spends 61% of their income on housing here.
No. 10 – Santa Ana, California.
Median household income: $74,185.
Median house price: $750,000
Mortgage as % of income: 62%
Another city in Orange County made the list. At $750,000, the average homeowner will pay a whopping 62% of their income just for mortgage payments.
No. 9 – Anaheim, California
Median household income: $80,486
Median house price: $834,250
Mortgage as % of income: 64%
The birthplace of Disneyland, Anaheim is located in the heart of Los Angeles. Its desirability means that housing prices are exorbitant.
#8 – San Diego, California
Median household income: $89,357
Median house price: $950,000
Mortgages as % of income: 66%
No, your eyes are not deceiving you, this is a clear trend. California’s coastal cities dominate the list of least affordable housing in the entire country.
No. 7 – San Francisco, California.
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 the country at nearly $1.4 million. A high median income helps offset affordability somewhat, but the average homeowner will still put 67% of their salary on a mortgage.
No. 6 – Long Beach, California.
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 of affordability. This median income in this city would have to fork out more than 70% of their salary to afford a house.
#5 – Hialeah, Florida
Median household income: $40,036.
Median house price: $465,000
Mortgages as % of income: 73%
Hialeah is Miami’s largest suburb. While home prices are a relatively modest $465,000, the median household income is also low at $40,000 a year.
No. 4 – Newark, New Jersey
Median household income: $38,854
Median house price: $385,000
Mortgage as % of income: 78%
Newark is the fourth least accessible city in the US and is a suburb of New York City. The average homeowner would have to shell out 78% of their income to afford a house.
No. 3 – New York, New York.
Median household income: $68,129.
Median house price: $925,000
Mortgages as % of income: 82%
Surprisingly, average New York home prices are lower than some of the other cities on the list, but median income is also lower, making homeownership out of reach for most buyers.
No. 2 – Los Angeles, California.
Median household income: $69,695.
Median house price: $975,000
Mortgage as % of income: 85%
Los Angeles ranks second in the US and first in California on the list of least affordable housing markets.
No. 1 – Miami, Florida
Median household income: $44,581
Median home price: $610,000
Mortgage as % of income: 87%
While most people would probably assume that New York, or perhaps San Francisco, would be the least accessible city in the US, unexpectedly Miami takes home the prize. While median home prices are half that of San Francisco, median income is even lower. The average homeowner has less than $500 a month left after paying off the mortgage to pay for everything else.
Andrew Herrig is the founder of Wealthy Nickel, where he writes about personal finance, jobs and entrepreneurship. As an avid real estate investor and owner of several businesses, he has a passion for helping others create wealth and shares his family’s experiences on his blog. Andrew’s advisory board has been featured on CNBC, Entrepreneur, Fox News, MSN and more.