Taking the leap into home ownership is a big deal. Long considered the American Dream, it signals an entry into
Only in eight of the largest 25 U.S. metropolitan areas can a median-income household afford a median-price home, according to a review by Interest.com. Last year, 14 of the 25 were affordable for middle-income homeowners.
Salaries have not kept up with rising home prices across the nation, particularly in coastal cities, with San Francisco ranking as the least affordable of the 25 largest cities. On average, home prices in these cities rose 16%, while incomes grew by 3%. Rising interest rates also contributed toward less affordability. Interest.com ranked a city’s affordability based on its median income’s relationship to median home price. In San Francisco, for example, the median income falls nearly 48% short of what is needed to buy a mid-priced home.
On the other end of the spectrum is Atlanta, where the median household income is 25% greater than what is needed to buy a median-priced house. Real estate experts outlined the differences between these locations, like geographical limitations in the Bay Area and room to expand around Atlanta.
The Most Affordable Cities
In these metro areas, the median income exceeded the amount needed to buy a mid-priced home by more than 11%. Of the 25 largest metro areas, Detroit and Pittsburgh are also among the five cities with the lowest median incomes.
- Atlanta (+24.92%)
- Minneapolis (+23.86%)
- St. Louis (+17.94%)
- Detroit (+16.87%)
- Pittsburgh (+11.33%)
The Least Affordable Cities
While San Francisco has one of the highest median incomes of the 25 largest metro areas, it doesn’t make up for the highly competitive real estate market. Conversely, the Miami area has one of the lowest median incomes, which results in houses being less affordable.
- San Francisco (-47.93%)
- San Diego (-37.71%)
- New York (-35.82%)
- Los Angeles (-30.31%)
- Miami (-24.56%)
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