Home prices and mortgage costs have risen rapidly over the past year. Mortgage rates, which were below 3% in some cases a year ago, are now over 5%. The median price of an existing home in America just hit a record at $375,300. In cities such as San Francisco and New York, prices can be two to three times higher than that.
Home prices have risen so quickly in some cities that residents can no longer afford to buy a new home. A case in point is Boise, where the mayor said affordable housing has started to disappear.
How much do home prices differ from state to state and metro to metro? The answer is that the gulf between one metro and another can be substantial. In some expensive cities, income determines whether people can afford a home. According to the Economic Policy Institute (EPI), a nonprofit think tank, a family of four (two adults and two children) can expect to pay an estimated $15,031 on housing in 2022. This amount varies across the country, however. In many major metropolitan areas, families are paying thousands more than the estimated national average.
Using data from the EPI’s Family Budget Calculator, 24/7 Wall St. identified the metro area where families pay the most for housing. Metros were ranked on 2022 estimates of housing and utility costs for a modest two-bedroom rental.
Among the metros we considered, housing costs for a family of four range from about $15,600 to nearly $43,000. Most metro areas we looked at are in the west, including 14 in California alone. Higher housing costs in these places are often a reflection of what residents can afford. Most metros on the list have a higher median family income than the national average of $80,069. Home values also tend to be higher in areas with high housing costs, making homeownership prohibitively expensive for larger shares of the population
The metro where families pay the most for housing is San Francisco-Oakland-Berkeley. Here are the details:
- Estimated annual housing costs: $42,636
- Median family income: $131,087 (second highest of 376 metros)
- Homeownership rate: 55.0% (19th lowest)
- Median home value: $888,500 (second highest)
In the Family Budget Calculator, the EPI estimates the housing costs for families to maintain a modest yet adequate standard of living. The budgets are created for 10 family types for U.S. counties and metro areas. A family of four is defined by the EPI as a married couple living with their two children, and the children are assumed to be a 4-year-old and an 8-year-old.
We used the 384 metropolitan statistical areas as delineated by the United States Office of Management and Budget and used by the Census Bureau as our definition of metro areas.
Metros were ranked based on the EPI’s annual housing cost estimates. Ties were broken by five-year estimates of median gross rent from the U.S. Census Bureau’s 2020 American Community Survey (ACS), with higher rental costs ranked higher.
Additional information on median family income, homeownership rate and median home value are from the 2020 ACS. Because the Census Bureau did not release one-year estimates for 2020 due to data collection issues caused by the COVID-19 pandemic, all ACS data are five-year estimates.
Click here to see all the metros where families pay the most for housing.
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