Least Affordable Housing Markets

April 30, 2014
Laura Joszt

As the real estate market heals, it brings to surface a reality many people are unhappy to face: housing is becoming more unaffordable again.

As the real estate market heals, it brings to surface a reality many people are unhappy to face: housing is becoming more unaffordable again. In some markets it’s clearly better to rent than buy, while the opposite is true elsewhere in the country. Unfortunately, there are plenty of counties in the United States where both buying and renting are exorbitantly expensive.

According to RealtyTrac, there are still 131 counties in the US where it is cheaper to rent housing than it is to buy, which represents 8% of the country.

“The bad news is that the minority of counties where buying or renting is unaffordable represent high density population centers where many Americans live,” RealtyTrac Vice President Daren Blomquist wrote.

For owners, 78 counties were considered unaffordable because the average monthly mortgage for a median-priced residential property was more than 30% of the monthly income for a median-income household. Although just 5% of the counties were considered unaffordable, they have 15% of the total population of all counties analyzed, according to RealtyTrac.

Blomquist pointed out that one in every 8 Americans live in housing markets where both the average rents and the median home prices are unaffordable for median income earners.

Unsurprisingly, the following list is mostly populated by housing markets in California and New York, although there are some surprisingly entries. To determine the affordability of a housing market, RealtyTrac compared the average mortgage or rent to the median household income. Anything where those costs exceed 30% was considered unaffordable.

10. (tie) Los Angeles County, California

Average mortgage: $2,169/month

Mortgage/monthly income: 48%

Median household income: $54,503

Rodeo Drive in Los Angeles

Perhaps the only thing surprising about seeing Los Angeles on the list is that it landed so far from the top of the list. Renting would be considered more affordable, although still unaffordable as far as RealtyTrac is concerned, since the average $1,890 a month is 42% of income.

10. (tie) Queens County, New York

Average mortgage: $2,298/month

Mortgage/monthly income: 48%

Median household income: $56,886

Little Neck

Renting would be a better option for people living in Queens. While a mortgage accounts for 48% of income, the average monthly rent ($1,852) is 39% of income. It’s still considered unaffordable, but it’s financially better than buying.

8. Marin County, California

Average mortgage: $3,847/month

Mortgage/monthly income: 49%

Median household income: $94,382

Sausalito

Located across the Golden Gate Bridge from San Francisco, Marin County has, by far, the highest median household income. That doesn’t mean much, though, when monthly mortgage is creeping up near $4,000.

Renting would also cost a lot: $2,657.

7. San Mateo County, California

Average mortgage: $3,767/month

Mortgage/monthly income: 54%

Median household income: $83,833

Pacifica

High household incomes don’t guarantee affordable housing in San Mateo County, which is associated with Silicon Valley because it is home to various high-tech companies and venture capital firms.

Rent is slightly more affordable at $2,657 a month, but still accounts for 38% of median household income.

6. Summit County, Colorado

Average mortgage: $2,763/month

Mortgage/monthly income: 56%

Median household income: $59,131

Main Street in Breckenridge

Renting would be a better option in Summit County, which is full of ski resort towns and part-time residents. While a mortgage would eat up more than half of a family’s median household income, rent, at $1,619 a month, accounts for just a third of income.

5. Taos County, New Mexico

Average mortgage: $1,524/month

Mortgage/monthly income: 58%

Median household income: $31,461

Red River

The median household income in Taos County is far lower than not only the majority of counties in the top 10, but also the national average of $51,017. The county is located between Carson National Forest and Santa Fe National Forest, an hour-and-a-half from Santa Fe.

Rent is a slightly more affordable option, but with $1,123 a month being 43% of median household income, it’s still considered unaffordable.

Taos County is also far less populated than the rest of the places in the top 10.

4. Bronx County, New York

Average mortgage: $1,782/month

Mortgage/monthly income: 64%

Median household income: $33,494

Co-op City

Renting isn’t any better in the Bronx. In fact, renting is even less affordable. While the average monthly mortgage is $1,782 a month, rent costs $1,852 on average, which means it would be better to buy. However, either option will still account for roughly two-thirds of median household income.

3. San Francisco County, California

Average mortgage: $4,599/month

Mortgage/monthly income: 70%

Median household income: $78,750

View from the top of Lombard Street

Although San Francisco doesn’t take the top spot, the average monthly mortgage payment is more expensive than even the market at number one. However, that is balanced out a little by the slightly higher incomes. Rent is slightly more manageable: $2,657 to rent is 40% of the median household income, but still considered unaffordable.

2. Kings County, New York

Average mortgage: $2,959/month

Mortgage/monthly income: 74%

Median household income: $48,005

Prospect Heights, Brooklyn

The median household income in the United States was $51,017, according to the latest census numbers, which puts the residents of Kings County (Brooklyn) at just under the national average. In comparison, Realtor has reported the country’s average monthly mortgage payment at $1,061, more than half of what Brooklyn’s resident pay.

Renting is better than buying in Kings County, but at 46% of income, it’s still considered unaffordable.

1. New York County, New York

Average mortgage: $4,581/month

Mortgage/monthly income: 77%

Median household income: $70,964

Battery City Park

Owning real estate in New York County (aka Manhattan) is incredibly expensive; however, according to the rent figures from RealtyTrac, renting is just on the cusp of affordable. With average monthly rent at $1,852, that cost is 31% of median household income.