In this article, we will be covering the 20 least affordable metros for homebuyers in the US. If you wish to skip our detailed analysis, you can move directly to the 5Least Affordable Metros for Homebuyers in the US.
Signs of Recovery in the US Real Estate Market
The US real estate market was plagued by multiple issues in 2023. While soaring prices disabled many from buying a home, high mortgage rates convinced homeowners not to sell their homes. This led to a serious shortage of inventory which was unable to keep up with the rising demand. As 2024 commenced, certain signs of recovery from the aforementioned housing crisis were observed. Improved builder confidence depicted better conditions for future construction. On January 17, CNBC reported that the homebuilder sentiment climbed up in January and reached its highest since September 2023.
With the spring homebuying season, an affordable inventory of houses gave a sigh of relief to Americans who still wish to buy a house. For the week ending March 14, Realtor reported that the annual listing price growth also dropped below 0 in the week ending March 9, thereby recording the first week of year-over-year price drops since July 2023. Affordable homes within the price bracket of $200,000 and $350,000 have also recorded an increase.
Current Affordability Scenario
In regards to home prices, 47 of the 50 largest metro areas have witnessed a rise since 2023. The highest annual price gains have been recorded at 12.5% for Hartford, 10.8% for San Diego, 8.8% for San Jose, 8.8% for Boston, and 8.4% for Providence. You can have a better idea of expensive housing markets by taking a look at the most overpriced housing markets in America and the US metros with the highest median list prices. On the other hand, prices have dropped in New Orleans, Austin, and San Antonio.
Since 202o, the income required to afford a home has increased by 80% in the US. Home prices have been reported to rise by 42.4% while the monthly mortgage payment on a typical home in the country has doubled since that period. More than half of American households could afford to own a home in 2020. However, the amount needed to afford a typical mortgage payment on a home currently exceeds the US average annual income. Expensive metros in this regard include San Jose, San Francisco, Los Angeles, and San Diego. On the contrary, Pittsburgh, Memphis, Cleveland, and New Orleans are places where homebuyers can afford homes relatively easily.
Reputable Real Estate Options to Look Out For
Would-be homebuyers across the United States can seek convenient and affordable housing options from M.D.C. Holdings, Inc. (NYSE:MDC), KB Home (NYSE:KBH), and Century Communities, Inc. (NYSE:CCS). Let’s take a look at what these homebuilders have been up to.
M.D.C. Holdings, Inc. (NYSE:MDC) operates Richmond American Homes which is one of the largest homebuilders in the country. The homebuilder has operations in multiple states including Alabama, Arizona, California, Colorado, Florida, Idaho, Maryland, Nevada, New Mexico, Oregon, Pennsylvania, Tennessee, Texas, Utah, Virginia, and Washington. On April 1, M.D.C. Holdings, Inc. (NYSE:MDC) reported that its subsidiary Richmond American Homes of Virginia, Inc. announced the grand opening of its new community in Locust Grove. The community ‘Wilderness Shores’ offers two-story homes priced from the $400,000s. Some of the amenities available for those who wish to live in the community include a community clubhouse, pool, playground, and walking trails. Downtown Fredericksburg, Orange, Lake Anna, and Shenandoah National Park can also be visited while staying at Wilderness Shores.
KB Home (NYSE:KBH) aims to build personal relationships with customers by building each home uniquely. The homebuilder has constructed more than 680,000 quality homes in its history. On March 27, KB Home (NYSE:KBH) announced the grand opening of its recent home community in Lakeland, Florida. The community ‘Ross Creek’ allows access to downtown Lakeland and Lakeland Linder International Airport. Residents can also conveniently commute to Tampa and Orlando. Pricing for the new homes at Ross Creek starts from the mid $300,000s.
Century Communities, Inc. (NYSE:CCS) serves as one of the largest American homebuilders and operates in 18 states and more than 45 markets across the country. The company is involved in the construction, innovative marketing, and sale of quality homes. On April 2, Century Communities, Inc. (NYSE: CCS) reported that its Century Complete brand has initiated sales in a new community in Rincon. The community ‘Pine Brook’ is located close to employment and entertainment hubs in Savannah. Homes at Pine Brook have been priced from the low $300,000s.
You can also take a look at the largest homebuilders in the US. Keeping the current housing dynamics in mind, let’s move to the 20 least affordable metros for homebuyers in the country.
20 Worst Performing Housing Markets in the US
20 Worst Performing Housing Markets in the US
Our Methodology:
In order to compile a list of the 20 least affordable metros for homebuyers in the US, we sourced data from Zillow. We have incorporated the metro-wise monthly household income required to pay the typical mortgage and afford the home comfortably as our primary metric.
We have supplemented the aforementioned metric by mentioning the number of years needed to save for a 20% down payment on a typical home. This additional metric shows us how the least affordable metros continue to deprive many buyers of up-front affordability. We have also cited the most recent typical home value for each metro for a better understanding of the current real estate situation, available as of February.
20 Least Affordable Metros for Homebuyers in the US
20. Spokane, Washington
Household Income Required to Afford a Home:41.3%
Time Period Needed to Save for 20% Down Payment: 10.6 Years
Average Home Value: $398,826
The city of Spokane is situated in eastern Washington and ranks as one of the least affordable metros for homebuyers in the country. While the typical monthly mortgage payment in the city is $2,075, the share of monthly income needed to pay the typical mortgage is 41.3%.
19. Cape Coral, Florida
Household Income Required to Afford a Home:41.5%
Time Period Needed to Save for 20% Down Payment: 10.3 Years
Average Home Value: $396,012
Households in Cape Coral need to dedicate 41.5% of their monthly incomes to pay the typical mortgage which depicts the lack of housing affordability. 10.3 years are needed to save for a 20% down payment in the city.
18. Providence, Rhode Island
Household Income Required to Afford a Home:41.5%
Time Period Needed to Save for 20% Down Payment: 10.2 Years
Average Home Value: $454,846
As of February, Providence boasts a monthly mortgage payment of $2,366. Simultaneously, it takes 10.2 years to save for a 20% down payment in the city.
17. Denver, Colorado
Household Income Required to Afford a Home:42.1%
Time Period Needed to Save for 20% Down Payment: 10.9 Years
Average Home Value: $581,367
The capital of Colorado, Denver, ranks as another less affordable metro for homebuyers. As of February, 42.1% of the monthly household income needs to be dedicated to afford a home comfortably in the city.
16. Portland, Oregon
Household Income Required to Afford a Home:43.3%
Time Period Needed to Save for 20% Down Payment: 11.2 Years
Average Home Value: $538,277
As of February, the typical home value in Portland is $538,277. The metro is expensive in terms of being able to afford the mortgage payment.
15. Stockton, California
Household Income Required to Afford a Home:43.8%
Time Period Needed to Save for 20% Down Payment: 11.3 Years
Average Home Value: $527,570
Stockton requires 43.8% of the monthly household income to be spent to comfortably afford a home thereby ranking as one of the least affordable metros for homebuyers in the US. The most recent typical home value in the city was recorded at $527,570 in February.
14. North Port, Florida
Household Income Required to Afford a Home:44.0%
Time Period Needed to Save for 20% Down Payment: 11.1 Years
Average Home Value: $454,960
As of February, the monthly mortgage payment in Northport is $2,367. 11.1 years are needed to afford a 20% down payment in the city.
13. Bridgeport, Connecticut
Household Income Required to Afford a Home:44.4%
Time Period Needed to Save for 20% Down Payment: 10.5 Years
Average Home Value: $596,585
Bridgeport is another housing market that doesn’t offer favorable conditions to homebuyers. 44.4% of the monthly household income needs to be spent to afford a home comfortably in the city.
12. Sacramento, California
Household Income Required to Afford a Home:46.2%
Time Period Needed to Save for 20% Down Payment: 11.8 Years
Average Home Value: $568,279
Sacramento serves as the capital city of California where the average home value is $568,279. 11.8 years need to be spent to save for a 20% down payment in the metro.
11. Boston, Massachusetts
Household Income Required to Afford a Home:47.6%
Time Period Needed to Save for 20% Down Payment: 11.8 Years
Average Home Value: $664,491
The capital of Massachusetts, Boston, ranks among the 20 least affordable metros for homebuyers in the US. As of February, the share of monthly income needed to pay the typical mortgage is 47.6% in Boston.
10. Seattle, Washington
Household Income Required to Afford a Home:48.7%
Time Period Needed to Save for 20% Down Payment: 12.5 Years
Average Home Value: $719,217
Seattle is another one of the least affordable metros for homebuyers in the US. 48.7% of the monthly household income is required to pay the typical mortgage in the city.
9. Riverside, California
Household Income Required to Afford a Home:49.5%
Time Period Needed to Save for 20% Down Payment: 12.7 Years
Average Home Value: $569,208
The 20 least affordable metros for homebuyers in the US rank Riverside as well. While the typical monthly mortgage payment in the metro is $2,961, the years required to save for a 20% down payment were recorded at 12.7.
8. Miami, Florida
Household Income Required to Afford a Home:50.8%
Time Period Needed to Save for 20% Down Payment: 12.4 Years
Average Home Value: $477,917
The typical home value in Miami is 477,917 as of February. 50.8% of the monthly household income is required to afford a home comfortably in Miami.
7. New York City, New York
Household Income Required to Afford a Home:57.0%
Time Period Needed to Save for 20% Down Payment: 13.0 Years
Average Home Value: $634,651
As of February, New York City boasts a typical monthly mortgage payment of $3,302. It takes 13 years to ensure up-front affordability in the city’s housing market.
6. Urban Honolulu, Hawaii
Household Income Required to Afford a Home:58.3%
Time Period Needed to Save for 20% Down Payment: 16.4 Years
Average Home Value: $860,011
Urban Honolulu ranks as one of the least affordable metros for homebuyers in the US. The monthly income share required to pay the typical mortgage is 58.3% which simply deems the market unaffordable for many.
