Dive Brief:
-
The least affordable housing markets in the U.S. include the usual suspects — San Francisco Bay Area and New York City — as well as a few lesser-known ones — Teton County, WY, and Dukes County, MA, for example — according to a report by Overflow Data analyzed by Business Insider.
-
San Francisco’s median home value of $800,000 starkly contrasts the area’s median income of $81,000, resulting in a price-to-income ratio of 9.8. In New York’s Manhattan borough, the median home value is $849,000 and the median income is $73,000 for a price-to-income ratio of 11.7.
-
Other markets where home prices severely outweigh income don’t typically make headlines. Teton County, WY, for example, has a median home value of $689,000 against a median income of $75,000, giving it a price-to-income ratio of 9.1. Dukes County, MA, has a median home value of $661,000 but median income of $64,000 for a price-to-income ratio of 10.3.
Dive Insight:
The survey, which plots median home values against median household income, further highlights the growing challenge of affordability across the country. Particularly, how affordability issues are extending beyond major metros and into smaller markets as potential buyers look for housing in new areas of job growth and supply there struggles to keep up.
In its latest monthly ranking of housing markets where homes sell the fastest, Realtor.com noted that West Coast cities like Vallejo, CA, near San Francisco, as well as San Diego and San Jose, continued to report robust sales and high prices. Smaller cities where already-limited supply is being met with renewed demand, including Midland, TX, and Yuba City, CA, joined December’s list.
Affordability concerns are not expected to ease in the near-term. The latest CoreLogic Home Price Index forecast home prices to increase 4.7% from November 2016 to November 2017, down from the 7.1% increase reported from November 2015 to November 2016.
Meanwhile, the most recent Zillow Home Value Index showed home values jumped 6.5% from a year earlier to $192,500 in November, their fastest annual pace since 2006.
For more housing news, sign up for our daily residential construction newsletter.