Dive Brief:
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Despite steady home-price increases in many large U.S. metros, some cities within those regions offer lower-cost housing options, according to Zillow.
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Buyers and renters electing to live in satellite cities where mortgages take a smaller share of their income will likely face trade-offs, including longer commutes and fewer community features.
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The disparity is due to the factors attracting residents to and driving growth in the higher-cost areas, including job growth. Markets in which this is a trend include the San Francisco Bay Area and Seattle
Dive Insight:
Zillow warned that if household incomes fail to keep up with increases in home prices, particularly if mortgage rates continue to rise, the affordability gap in these metros will linger.
A survey last week put three U.S. cities on the list of the top 10 least-affordable housing markets in the world: Santa Cruz, CA; Santa Barbara, CA; and San Jose, CA. Meanwhile, 82 of the top 99 most affordable markets of all sizes were in the U.S., led by Racine, WI.
Markets that haven’t seen significant home-price increases have largely been spared the affordability gap, Zillow noted, with home mortgages in cities like Kansas City, MO, claiming between 7.3% and 13.2% of typical buyers’ incomes there.
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