Median home prices vary from city to city. According to REALTOR Magazine, homebuyers would need to be in the top 20% to 30% of household earners to afford a median-priced home in some of the priciest areas of the country. A study from Zoocasa examined where these pricey areas are, and where homeowners amy find the most affordable homes, factoring in a 20% down payment, a mortgage rate of 4.5%, and a 30-year fixed-rate mortgage.
Detroit was Zoocasa’s affordable city, where 80% of potential buyers could afford a median-priced home. A median-priced home of $85,000 could be purchased with an income of $14,772 in Detroit. Similarly, 80% of potential buyers could afford a median-priced home in Oklahoma City. the city’s median $170,000 home could be purchased with a $29,544 income.
Many of the least affordable cities were in California. San Francisco was the least affordable city in the country, with just 20% of potential buyers able to afford a home at the city’s median home price of $1,418,500, which requires buyers to have an income of $246,432 to buy a home. In San Jose, buyers would need an income of $177,204 to buy a $1,020,000 median priced home, and in Los Angeles they would need to earn $147,672 to buy a median priced home of $850,000.
In San Francisco, Stanford University and Google are taking some actions to combat affordability issues. Stanford University has offered to invest $3.4 billion in housing development in Santa Clara County. The offer includes 2,172 workforce housing units, including 575 front-loaded Below Market Rate housing units, developed concurrently with a 1.2 percent annual growth rate of its academic facilities over roughly two decades.
Stanford’s offer comes on the heels of Google’s announcement that it will spend $1 billion on efforts aimed at increasing affordable housing in the San Francisco Bay area. Part of the plan is to utilize some of Google’s land.
The Bay Area is one of the most expensive areas in the country. Despite a 39% increase in inventory and an ongoing increase in affordability within the San Francisco Bay area, many homeowners and potential homeowners are still finding the area unaffordable.