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Large Cities Where Buying a Home is Too Expensive

30

March

By Natalie Wise

Living in a big city with over a million residents is expensive no matter how you look at it, but owning a home in these 10 large cities is even more expensive.

The difference in median income and the average price of a home is considered the home price-to-income ratio, where a low number is better because it means homes are more affordable for the average family.

However, Anaheim-Santa Ana-Irvine, Calif. has a sky-high ratio of 10.8 percent, making it the top most expensive city. While the average income is $60,583, the average home price is more than 10 times that: $681,640.

Many tech hot spots in California also face high housing costs. The No. 2 city is San Francisco with a ratio of 8.8. Incomes in San Francisco are higher at over $77,000 but home prices remain over $679,000.

San Jose has a home price-to-income ratio of 8.7 with average income nearly at $90,000 but the highest average home price on the list of $780,000.

In San Diego, prices are a lot lower than the previous California cities ($464,280) but the ratio is still at 7.3 there.

No. 5 is New York City-Wayne-White Plains N.Y./N.J., with a ratio of 7.1 and an average home price of $465,700.

Los Angeles’ ratio of 6.0 lands it at No. 6, where the average income is just over $60,000 and an average home sells for $405,580.

A second metropolitan statistical area of New York City that includes Northern New Jersey and Long Island comes in at No. 7 with a ratio of 6.0.

Boston is No. 8 with a 5.2 ratio and average home price of $375,900, still high for the average income of $72,769.

The only Florida city to make the list is Miami-Ft. Lauderdale, at 5.1 for the home price-to-income ratio. While the income there is lower at $48,582, houses average $246,000.

Last on the list is Seattle, where houses average $336,300, a ratio of 5.0 when compared to the median income of $67,437.

In these 10 cities, it may be worth consdering renting rather than purchasing a home, given the high ratios. For those looking into the possibilities, Zillow’s Breakeven Horizon can be a useful tool.

Related:
Suburban Living Heats Up in 2016
The Down Payment Quandary: Trying to Save 20 Percent
When Should Renters Become Buyers?

[Last modified: Wednesday, March 30, 2016 5:00pm]

    

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