To create its ranking, Creditnews used the median income for married households to determine the percentage of unaffordable neighborhoods. This figure was compared to the typical home value in each neighborhood, with areas deemed unaffordable if the monthly mortgage payment exceeded 25% of a couple’s household income.
Among the 10 cities with the most unaffordable neighborhoods, four are in California. Los Angeles and San Jose, two cities in the Golden State, were found to be 100% unaffordable for the average married couple household.
In fact, Los Angeles topped the ranking with the highest share of unaffordable neighborhoods in the U.S.
“L.A. has always been very expensive, but what we’re seeing now is that average house prices and overall housing costs are far exceeding average income growth,” Sam Bourgi, Senior Analyst at Creditnews Research, told CNBC Make It.
He added that the pandemic “basically made a bad situation even worse in terms of affordability” for the capital of the entertainment industry.
“People are spending much more of their income on housing every month,” he added.
According to a 2022 U.S. Census Bureau report, the median household income in Los Angeles was $83,411. That’s more than $150,000 less than the $237,281 household income needed to afford an average monthly mortgage of $5,932 in the city, according to a 2023 Redfin report.
But it’s not all bad news. The study found that cities in the Midwest, Rust Belt, and parts of the South still have plenty of affordability. Cleveland, Ohio, and Memphis, Tennessee, had 0% of unaffordable neighborhoods for the average married couple.
“There are affordable markets out there,” Bourgi said. “You have to ask yourself if you’re willing to move because they are going to be areas that people typically don’t find as attractive.”
These U.S. cities have the highest share of unaffordable neighborhoods:
- Los Angeles
- St. Louis
- Boston
- San Jose
- San Diego
- San Francisco
- New York City
- Miami
- Nashville
- Richmond
St. Louis, Missouri, ranked as the second most unaffordable housing market for the average married couple household, according to Creditnews Research.
The report found that 100% of St. Louis was unaffordable for the average family in 2024.
“What we’re seeing is people holding on to their homes, making the supply of available homes very low, and that affects affordability,” Bourgi said.
The average home value in St. Louis is $174,341, up 6.1% over the past year, according to Zillow.
