Which cities across the U.S. have residents spending more than the median ceiling of household income to own or rent? Ten cities make the list of places where the gap is widest between what people earn and what they pay for housing, according to a study by Realtor.com [1].
For the study, realtor.com looked at the median monthly housing costs in approximately 500 metros to pinpoint the markets where residents are spending the most on their homes by dividing the median monthly costs for renters and homeowners by the median monthly household income. The study limited its rankings to one metro per state.
With a median price list of $895,800 and 30 percent share of the median household income of $73,663 going towards housing for the average household, Santa Cruz in California topped the study's ranking as the most unaffordable city in the country. However, there might be hope for buyers still looking to enter this market. The study pointed out that despite the large gap in home prices versus average household income, over the past 12 months the prices in this seaside city have remained flat with inventory rising 45 percent.
If the West Coast has the most unaffordable city in the country, the East Coast is not far behind, with Miami, Florida taking the second spot on the rankings for the most unaffordable housing markets. A household earning a median income of $51,758 pays 29.7 percent of its income towards housing in this city where the median list price is slightly more than $385,000.
Grants Pass, Oregon was third in terms of unaffordability with 27.1 percent of a median household income of $40,705 going towards housing. Home prices in this city, the study revealed stood at $334,000.
Though Atlantic City, New Jersey is a relative bargain compared to most of the North East for retirees, according to the study, home prices here have been rising 6 percent year over year. With 26.9 percent of a median income of $57,514 going towards housing and a median list price at around $240,000, it is no surprise that the city was ranked fourth in this list.
New York, New York with a median list price of $515,100 and 26.4 percent of the median household income going towards housing, rounded off the Top 5 on this list.
Click here [2] to read the complete list of the most unaffordable housing markets.