A home for sale in the Sacramento area
A home for sale in metro Sacramento, where the median home costs the equivalent of 5.9 years of the median household income Rich Pedroncelli/AP

The rule of thumb is that the cost of your house should equal roughly 2.6 years of income. But in some U.S. cities, home prices are almost 10 times what the median household earns.

The rule of thumb long used by real estate agents and homebuyers is that you can afford a house if its price is equivalent to roughly 2.6 years of your household income. That ratio is based on historical nationwide averages under healthy economic conditions. But today, in many places around the country—particularly in coastal cities in California and along the New York–Boston–Washington corridor—housing has become staggeringly more expensive than that.

To get a sense of just how much more expensive, my colleague Charlotta Mellander and I looked at the number of years of median income it would take to buy a home in U.S. metropolitan areas. This metric helps us better understand the relative cost of housing compared to incomes. We used data on median housing values from Zillow and on median income (for households and individuals) from the U.S. Census Bureau’s American Community Survey.

Zillow’s data excludes several nondisclosure states, but includes information on the most expensive metros in New York, California, Massachusetts, Florida, and Washington, D.C. It’s also worth noting that our calculations reflect the years of income it would take to pay for the purchase price of a home only. They do not account for the added expense of mortgage interest, which would drive the cost considerably higher.  

Least Affordable Metros

Metro Years of Median Household Income to Buy Median Home
Los Angeles 9.6
San Jose 9.5
San Francisco 9.2
San Diego 7.9
Honolulu 7.6
Ventura, CA 7.2
Sacramento 5.9
Stockton, CA 5.9
Riverside, CA 5.9
Portland 5.6
Seattle 5.6
New York 5.4
Fresno, CA 5.4
Denver 5.4
Boston 5.2
Miami 5.0
Sarasota, FL 4.5
Stamford, CT 4.5
Las Vegas 4.5
Salt Lake City 4.5

By this metric, the least affordable metro of all is Los Angeles, where it would take nearly 10 years for the median household—using the three-times-greater-than rule—to buy the median-priced home. Not far behind are two Bay Area metros, San Jose and San Francisco, where it would take more than nine years to buy a home.

In San Diego and Ventura, California, and Honolulu, it takes seven years for the median household to buy the median home. In New York, Seattle, Portland, and Boston, the median home will set you back five-plus years of income. Even in the less pricey Sunbelt cities of Las Vegas, Salt Lake City, and Phoenix, the median home costs the equivalent of 4 years of median household income. California stands out as by far the most expensive region, with eight of the 10 costliest cities located there.

In most of these expensive metros, unaffordability has worsened since we last took a look, back in 2013. Portland saw a major increase in the income-to-house-price ratio, going from 4.7 times to 5.6. Seattle and Riverside both saw increases of about half a point. Most other cities went up by around a quarter of a point. New York and Honolulu, interestingly, were among the few metros where the ratio actually declined.

Because this metric looks at housing unaffordability as a function of not just cost, but cost and income, the top-ranked metros on this list differ somewhat from those on other such rankings. The D.C. metro, which consistently ranks as one of the most expensive metros based on house prices and rents, looks more affordable on our housing-cost-to-income measure. It takes about 3.9 years of income to buy a home in D.C., which ranks 34th on this list. That’s about the same as Dallas and Tampa, and better than Nashville or Austin.

The 10 most affordable metros in the country are mainly in the Rust Belt, with six in Ohio, three in Pennsylvania, and one in upstate New York. In these areas, a house costs between two and 2.7 years of income—that is, four or five times less than in the least affordable metros.

Most Affordable Metros

Metro Years of Median Household Income to Buy Median Home
Harrisburg, PA 2.7
Cincinnati 2.6
Cleveland 2.6
Pittsburgh 2.6
Buffalo 2.5
Akron, OH 2.5
Toledo, OH 2.5
Dayton, OH 2.3
Scranton, PA 2.0
Youngstown, OH 1.9

The picture changes somewhat when we look at housing cost as a function of individual, as opposed to household, income. On this metric, San Jose tops L.A. as the least affordable place. The median house there will set you back a whopping 20 years of the median individual income.

The median home is equivalent to 19 years of individual income in L.A.; 18 in San Francisco; 17.5 in Ventura; and 16 in Honolulu. It takes more than 10 years of the median individual income to buy in Provo, Riverside, Stockton, Sacramento, and Fresno. The median home costs more than nine years of individual income in Denver, Boston, New York, Stamford, and Miami. In fact, based on median individual income, housing is fairly unaffordable just about everywhere.

Least Affordable Metros for Individuals

Metro Years of Median Individual Income to Buy Median Home
San Jose 20.2
Los Angeles 19.2
San Francisco 17.9
Ventura, CA 17.6
Honolulu 16.3
San Diego 16.1
Provo, UT 12.1
Riverside, CA 11.5
Stockton, CA 11.2
Sacramento 11.1

Housing affordability is a function of both housing prices and incomes. While it is true that incomes are higher in more expensive cities, prices are higher still. Higher productivity in these places does lead to higher wages, but they’re still not enough to meet the increased cost of housing. (Our analysis covers the price of the median home; housing prices are much, much higher in certain neighborhoods in these cities and metro areas.)

As a growing chorus of urban economists has pointed out, the problem of housing affordability in expensive cities is due to land-use restrictions and NIMBYism, which are choking housing supply, as well as a lack of funding for affordable housing. And even though taller buildings are rising in many downtown cores, virtually no housing has been added to older inner suburbs in the past half-century.

While the problem is a big and broad one, with people of all classes and professions getting priced out of expensive cities, it hits the blue-collar working class and low-wage service workers the hardest. Even if their wages are a bit higher in these cities, the price of housing more than eliminates that income advantage.

Coping with the housing crisis will require a renewed commitment to building more housing, especially affordable housing. But it will also require structural economic adaptations, like higher wages for service workers and better career pipelines. Housing unaffordability must be understood as a core feature of economic inequality.

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