Housing is 'impossibly unaffordable' in these US cities
Story at a glance (NewsNation) — Five U.S. cities are considered "impossibly unaffordable" when it comes to housing, placing them among the most expensive markets in the world, according to a new study. Researchers at Chapman University and the Frontier Centre for Public Policy in Canada analyzed 94 major cities in eight countries and determined...
Story at a glance
- Four California cities, led by San Jose, made the list of the ten least affordable housing markets in a new study.
- Honolulu was also included in the top ten least affordable markets.
- On the other end of the scale, Pittsburgh, Rochester and St. Louis were identified as the most affordable major cities in the world, according to the study.
(NewsNation) — Five U.S. cities are considered "impossibly unaffordable" when it comes to housing, placing them among the most expensive markets in the world, according to a new study.
Researchers at Chapman University and the Frontier Centre for Public Policy in Canada analyzed 94 major cities in eight countries and determined San Jose, California is the least affordable housing market in the U.S. The Silicon Valley metro was the fourth most unaffordable in the English-speaking world.
In fact, four of the top 10 least affordable housing markets on the list were in California: Los Angeles (5th), San Francisco (8th) and San Diego (10th). Honolulu, ranked sixth, was the only city outside the Golden State ranked near the top.
"Restrictive housing policies may be packaged as progressive, but in social terms, their impact could better be characterized as regressive," Joel Kotkin, Director for Chapman's Center for Demographics and Policy, said in the report.
The rankings were based on each metro's price-to-income ratio, which is the median house price divided by the median household income.
The report found the gap between housing costs and income has widened since the pandemic, triggering a cost-of-living crisis for many American families.
"For decades, home prices generally rose at about the same rate as income, and homeownership became more widespread," said Wendell Cox, the study's author. "But affordability is disappearing in high-income nations as housing costs now far outpace income growth."
As for what's driving the crisis, the report blamed land use policies that "artificially restrict housing supply" and drive up land prices.
A separate Zillow report out this week found the U.S. housing shortage now stands at 4.5 million homes. That deficit is one of the reasons prices continue to hit record highs even as mortgage rates remain elevated.
Even with those issues, the Chapman study did have some good news for Americans. Researchers found nine of the 10 most affordable cities were in the U.S.
Of the nearly 100 cities analyzed, Pittsburgh's housing market was the most affordable, followed by Rochester and St. Louis. Cleveland, Buffalo and Detroit also ranked near the top for affordability.
The three least affordable housing markets were all outside the U.S.: Hong Kong, China; Sydney, Australia; and Vancouver, Canada.
The least affordable major cities in the world, according to the study:
- Hong Kong, China
- Sydney, New South Wales (Australia)
- Vancouver, British Columbia (Canada)
- San Jose, California (U.S.)
- Los Angeles, California (U.S.)
- Honolulu, Hawaii (U.S.)
- Melbourne, Victoria (Australia)
- San Francisco, California (U.S.)
- Adelaide, South Australia (Australia)
- San Diego, California (U.S.)
The most affordable major cities in the world, according to the study:
- Pittsburgh, Pennsylvania (U.S.)
- Rochester, New York (U.S.)
- St. Louis, Missouri (U.S.)
- Cleveland, Ohio (U.S.)
- Edmonton, Alberta (Canada)
- Buffalo, New York (U.S.)
- Detroit, Michigan (U.S.)
- Oklahoma City, Oklahoma (U.S.)
- Cincinnati, Ohio (U.S.)
- Louisville, Kentucky (U.S.)
The report also listed 17 "severely unaffordable" housing markets in the U.S., ranked one tier below the "impossibly unaffordable" category. Perhaps unsurprisingly, many of these cities are located on the West Coast, such as Seattle and Portland, and the California areas of Riverside-San Bernardino, Sacramento, and Fresno.
On the East Coast, these markets include New York, Boston, and Providence, Rhode Island. Then, there's the Southwest, with Las Vegas, Phoenix and Tucson, making the list. The South also has three "severely unaffordable" markets, all in Florida: Miami, Orlando and Tampa.
Meanwhile, the Mountain and Midwest regions had the fewest markets each in this category, including Denver, Colorado; Salt Lake City, Utah; and Milwaukee, Wisconsin.
Nexstar's Ashleigh Jackson contributed to this report.