Some of the most attractive metro areas in which to live are completely inaccessible to middle-class homeowners, a trend which is becoming more pronounced. Families paying over 30 percent of their incomes toward housing are considered “cost-burdened” by the U.S. Department of Housing and Urban Development (HUD). Furthermore, cities in which middle-class households pay over a third of their monthly income in rent are considered unaffordable. Some of the fastest-growing cities in the country have found themselves in this category upon release of 24/7 Wall Street’s latest affordability study, which examined the housing cost burden for middle-class households.
“While the housing cost burden for low-income households is often offset though housing subsidies, there are few forces that protect middle-income households from the rising cost of real estate,” observed 24/7 Wall Street analyst Samuel Stebbins.
The 5 cities with the worst affordability environment for the middle class:
- San Francisco-Oakland-Hayward, California
Median single-family home value: $909,836
Median household income: $96,9677
Cost-burdened middle-class households: 55.9%
- San Jose-Sunnyvale-Santa Clara, California
Median single-family home value: $1.2 million
Median household income: $110,040
Cost-burdened middle-class households: 56.6%
- Oxnard-Thousand Oaks-Ventura, California
Median single-family home value: $578,148
Median household income: $80,135
Cost-burdened middle-class households: 53.5%
- San Diego-Carlsbad, California
Median single-family home value: $570,533
Median household income: $70,824
Cost-burdened middle-class households: 52.2%
- Urban Honolulu, Hawaii
Median single-family home value: Analysts had to use the median monthly mortgage payment to evaluate this area since urban Honolulu is overrun with vacant, high-end Class A rentals but offers very few options in other income brackets.
Monthly mortgage rate: $4,946.
Median household income: $80,513
Cost-burdened middle-class households: 51.9%