Homes are now affordable in just 6 major American cities
Heritage Foundation economist Peter St. Onge offers his analysis on the housing unaffordability crisis on 'The Bottom Line.’
Homeownership is out of reach for most Americans in the majority of the largest cities nationwide.
New findings from Clever Real Estate show that 44 of the 50 biggest metro areas in the U.S. do not have prices low enough to be considered affordable for the median-earning household.
A home is considered «affordable» for the typical family if it costs no more than 28% of a household's annual income. But for the vast majority of cities, that is not enough to be able to buy a median home at the median local income – even when posting a 20% down payment, according to the study.
HOME PRICES SURGE TO ANOTHER RECORD HIGH IN FEBRUARY
There are just six cities where the median-priced home is affordable for median-income earners:
For instance, in Pittsburgh, the median home sells for about $199,573; after a 20% down payment, the mortgage – including taxes and insurance – comes out to roughly $1,398 per month. In order to be able to afford that, a person needs to earn a minimum of $59,919 per year – which is lower than the median household income of $70,607 in Pittsburgh.
But the overwhelming majority of cities are unaffordable for buyers, with a large gap between suggested income to afford a house and actual income.
Los Angeles, San Jose, California, San Diego, San Francisco, New York, Miami and Riverside, California, ranked as the worst cities for first-time buyers.
Los Angeles is the least affordable city in the country. It requires an income of $249,471 to comfortably afford a median-priced home – but the actual median income in the city is less than half of that, at $87,743.
WHY CAN'T YOU FIND A
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