The housing market continues to be bleak, according to a new report from forecasting and quantitative analysis firm Oxford Economics,
Home prices have soared in every major metro area in the US over the last five years and mortgage rates nearly doubled. This has led to housing affordability dropping “significantly” with only one-third of households in the US earning enough to buy a house last quarter, according to the report.
Meanwhile, in June, home prices were 47% higher than listed in early 2020, per CNBC,
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To afford a new, single-family home in the US (including paying both property taxes and home insurance) in Q3 2024, a household needs to earn an annual income of $107,700—nearly twice the household income needed in Q3 2019.
What are the most affordable metro areas in the US?
Many of the most affordable areas to live in the US are in the Midwest, according to the report, where nearly two-thirds of households could afford median-priced homes with salaries of $64,600 to $75,300.
The top of the list includes Decatur, IL; Cumberland, MD; Youngstown, OH; Charleston, WV; and Elmira, NY. When it comes to major metro areas, Oklahoma City, Memphis, Cleveland, Louisville, Detroit, and St. Louis, were deemed most affordable.
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What are the least affordable US metro areas?
The report found that most of the least affordable metro areas to live in the US are in California (San Jose, San Francisco, Los Angeles, and San Diego all made the list), and Honolulu, Hawaii, where, the report notes, ” fewer than 15% of households earned enough income to afford their respective housing costs in Q3 2024.”
San Jose was found to be the No. 1 least affordable, where median home prices hit $1.89 million in Q3 2024, per CNNResidents there need an annual income of $461,000 to afford a home.