Where are the country’s least affordable housing markets?

by MPA25 Jul 2017
by Francis Monfort

The top ten least-affordable cities in America are found in just three states: California, Florida, and New Jersey, according to a recent study by SmartAsset. California has the largest number of least-affordable cities at six, followed by New Jersey with three, Florida with two, and Indiana with one.

Passaic, N.J., ranked as the country’s least-affordable housing market. Average housing costs eat up a whopping 54% of the average household budget there, while tenants fork over 50% of their income for rent.

Here are the top ten:
  1. Passaic, N.J.
  2. Miami, Fla.
  3. Hawthorne, Calif.
  4. Davis, Calif.
  5. Baldwin Park, Calif.
  6. Paterson, N.J.
  7. El Monte, Calif.
  8. Inglewood, Calif.
  9. Westminster, Calif.
  10. Hialeah, Fla.

The Department of Housing and Urban Development (HUD) recommends that households should spend a maximum of 30% of income on housing. Average homeowners or tenants in all top-ten cities would be “housing-cost burdened,” as costs in all of them were above HUD’s figure.

Data showed that the least-affordable cities are not exclusively enclaves for the rich. SmartAsset said they are usually places were incomes can’t keep up with rising rental costs. San Francisco tenants pay about $1,660 per month on average – but the city has an average household income of $92,000 a year. In contrast, Passaic renters pay $500 less than those from the Bay Area, but average households in America’s least-affordable city make less than $27,000 annually.

To come up with the list, SmartAsset looked at cities’ affordability ratios: rent as a percent of income, average housing costs as a percent of median household income, and median home value to median household income.


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