GOBankingRates

Places Where 50% of Americans Can’t Afford a Home

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If you’re thinking about buying a home, you’re likely wondering, “How much house can I afford?” Of course, you can buy a lot more house for your money in some places. But if you live in one of the most expensive cities, you might not even be able to afford a home.

In fact, GOBankingRates found that in many large cities, homeownership is likely out of reach for more than half of the households. We used the median home listing price in the 100 biggest cities to figure the monthly mortgage payment. Using the rule of thumb that no more than 30 percent of income should go toward housing, we calculated the income needed to afford a mortgage in those cities. We then compared this income to the number of households with income equal to or greater than that amount.

Out of the 100 largest cities in the U.S., we ranked the ones where homeownership is out of reach for more than 50 percent of households, from the lowest percentage to highest. Click through to find out if you can afford a home in America’s largest cities.

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17. Atlanta

Median listing price: $329,999
Percentage of households that can’t afford a home: 53.9 percent

Atlanta is one of the cities where home prices are skyrocketing. Another GOBankingRates survey found that the median list price in Georgia’s capital and largest city has soared more than 50 percent since 2014.

As a result, the median household income in Atlanta — $53,843 — falls short of the annual income needed to pay the mortgage on a home with a median listing price of $329,999. It would take an annual income of $57,200 to pay a $1,430 monthly mortgage on a median-priced home.

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16. Nashville, Tenn.

Median listing price: $329,900
Percentage of households that can’t afford a home: 54 percent

The cost of living has been rising faster in Nashville this past year than in any other big city, another GOBankingRates survey found. Surging home prices have played a big role in the city’s overall cost of living increase.

Given that the median home listing price is $329,000, it would take an annual income $57,040 to pay a monthly mortgage of $1,426. However, the median household income of $54,310 in Nashville falls short. As a result, more than half of households can’t afford a home in the capital and largest city of Tennessee.

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15. Seattle

Median listing price: $688,000
Percentage of households that can’t afford a home: 57.6 percent

Seattle’s median listing price of $688,000 is among the highest on this list. However, the percentage of households that can’t afford a home isn’t as high as in other big cities because the median household income here is high — $83,476. It’s not high enough, though, to comfortably pay a monthly mortgage of $2,911 on a median-priced home. You’d need an income of $116,440 to afford a home in Seattle.

Find Out: How to Save for a Home While Renting

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14. Houston

Median listing price: $324,900
Percentage of households that can’t afford a home: 58.9 percent

Although Houston has the second-lowest median listing price on our list, homes still are too expensive for nearly 60 percent of households. That’s because the city’s median household income of $47,793 is well below the $56,160 annual income needed to pay a monthly mortgage of $1,404 on a median-priced home.

Home prices did drop around the time Hurricane Harvey hit in August 2017, according to Zillow data. But the city’s housing market appears to have recovered, and prices have been climbing.

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13. Washington, D.C.

Median listing price: $559,950
Percentage of households that can’t afford a home: 59.8 percent

Washington, D.C., is one of a few places where renting is more affordable than owning a home. It would take an annual income of $95,280 to pay the monthly mortgage of $2,382 on a home with a median list price of $559,950. Although relatively high, the city’s median household income of $75,506 isn’t high enough to make home ownership affordable for about 60 percent of households in the nation’s capital.

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12. Denver

Median listing price: $470,000
Percentage of households that can’t afford a home: 59.8 percent

Home prices have been rising across Colorado. In fact, it’s one of the states with the biggest real estate bubbles. In Denver, in particular, the home price-to-income ratio is particularly troubling.

With a median listing price of $470,000, it would take an annual income of $80,240 to afford a monthly mortgage of $2,006. However, the median household income in the city is $61,105. As a result, nearly 60 percent of households can’t afford a home in Denver.

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11. Dallas

Median listing price: $385,000
Percentage of households that can’t afford a home: 60.2 percent

Although the median listing price in Dallas is lower than in Denver and Washington, D.C., a slightly higher percentage of households can’t afford a home in this large Texas city. That’s because the median household income is noticeably lower — $47,243.

To afford the $1,651 monthly mortgage for a home with a median list price of $385,000, you would need an annual income of $66,040.

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10. New Orleans

Median listing price: $300,000
Percentage of households that can’t afford a home: 65.4 percent

Although New Orleans has the lowest median home listing price on this list, it’s still not low enough for more than 65 percent of the city’s households to afford a home. The city’s median household income of $38,681 isn’t high enough to pay the monthly mortgage of $1,308 for a house with a median listing price of $300,000. It would actually take an annual income of $53,320 to comfortably make a mortgage payment of that size.

See Also: 6 Things Every Homeowner Should Know About Property Taxes

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9. Oakland, Calif.

Median listing price: $605,000
Percentage of households that can’t afford a home: 65.7 percent

Compared with neighboring San Francisco, homes in Oakland are a bargain. But the median listing price still is too high for more than 65 percent of households to afford a home. It would take a $102,280 annual income to pay the $2,557 monthly mortgage for a median-priced home. But the median household income in Oakland is $68,060.

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8. San Diego

Median listing price: $659,000
Percentage of households that can’t afford a home: 65.9 percent

Only about one-third of San Diego residents can afford a home with a median list price of $659,000. That’s because the city’s median household income of $71,481 falls significantly short of the $111,160 needed to pay a monthly mortgage of $2,779 on a median-priced home.

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7. San Jose, Calif.

Median listing price: $880,703
Percentage of households that can’t afford a home: 67.8 percent

Incomes are high in this Silicon Valley city — but not high enough for more than 67 percent of households to afford a home. You’d have to earn $147,680 annually to cover the monthly mortgage of $3,692 on a median-priced home in San Jose. But the median household income there is $101,940.

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6. New York

Median listing price: $859,000
Percentage of households that can’t afford a home: 71 percent

New York is one of the worst places to live if you’re trying to save money because the cost of living is so high. Homes are especially expensive — so much so that 71 percent of households in the city can’t afford one. An annual income of $146,920 is needed to pay a monthly mortgage of $3,673 in New York, but the median household income of $58,856 doesn’t come close to being enough.

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5. Los Angeles

Median listing price: $749,000
Percentage of households that can’t afford a home: 72.9 percent

With a median home list price of $749,000, Los Angeles is one of the most expensive places for homebuyers. Because the median household income of $54,432 doesn’t go far enough in this high-priced market, nearly 73 percent of households can’t afford a home in LA.

In fact, LA residents would have to work more hours to afford a home than residents of any city other than New York, another GOBankingRates survey found.

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4. Long Beach, Calif.

Median listing price: $549,900
Percentage of households that can’t afford a home: 73.5 percent

Homeownership might be out of reach for an even larger percentage of households in this Southern California city than in nearby LA. Although the median listing price in Long Beach is $200,000 lower than in LA, a smaller percentage of households earn enough to afford the monthly mortgage payment of $2,330 for a median-priced home. It would take an annual income of $93,200.

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3. Miami

Median listing price: $450,000
Percentage of households that can’t afford a home: 74.3 percent

Although Miami is one of the few major cities where home prices are plummeting, prices haven’t dropped enough to make homes affordable for most of the city’s residents. In fact, nearly three-quarters of households in the city can’t afford a monthly mortgage of $1,925 on a home with a median listing price of $450,000. It would take an annual income of $77,000, but Miami’s median household income is just $34,901.

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2. Boston

Median listing price: $725,000
Percentage of households that can’t afford a home: 75.7 percent

If you want to own a home in the capital of Massachusetts, you would need an annual income of $122,160 to comfortably pay the $3,054 monthly mortgage on a home with a median listing price of $725,000. However, that’s nearly double the median household income of $63,621. As a result, three-quarters of Boston’s households can’t afford to buy a home.

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1. San Francisco

Median listing price: $1,199,000
Percentage of households that can’t afford a home: 76.7 percent

San Francisco actually is one of the major U.S. cities with the biggest cost-of-living decrease in 2017, a separate GOBankingRates study found. However, home prices still are high — the highest on this list. You’d have to earn $200,080 a year to comfortably cover a monthly mortgage of $5,002 on a home with a median listing price of $1.19 million. However, the median household income in San Francisco is $103,801.

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Where the Most Unaffordable Cities Are Located

The Golden State clearly dominates this list of places where more than half of households can’t afford a home, with six of its cities in the top 10. The map highlights how coastal proximity drives home prices higher and higher.

Up Next: The Best City in Every State to Buy a Home

Methodology: The median listing price for each city was current as of Oct. 31, 2017, sourced from Zillow. The average monthly mortgage payments were calculated using Zillow’s mortgage calculator. Mortgage terms were based on the city’s median listing price, 30-year fixed rate mortgage, 20 percent down payment and state average mortgage rate, sourced from Zillow on Dec. 1, 2017. The monthly mortgage payment was multiplied by 12 to get the annual mortgage payment amount. Based on the rule of thumb of putting no more than 30 percent of income toward housing, we calculated the income needed to afford a home in each city. We then compared this income to the number of households whose income was approximately equal to or greater than the amount in the 100 largest cities in the country, with household data sourced from the U.S. Census Bureau’s 2016 American Community Survey.