According to a new report from Redfin, a typical family in the San Francisco area would need to nearly triple their annual income to comfortably purchase a median-priced home. In stark contrast, the typical family in Detroit earns more than twice as much as they’d need to afford a median-priced home.
In San Francisco, ranked least affordable, the median household income of $92,714 falls far short of the $265,000 per year needed to afford a median-priced home, which clocks in at $1.42 million.
At the opposite end of the spectrum, a family in the Detroit metro would only need to earn $26,690 per year to purchase a home at the area’s median price point. That’s less than half of the area’s $56,339 median income, making it the most affordable metro.
The Least Affordable Metros
The five least affordable metros by that measure–percentage of the area’s median household income a family would need to buy a local median-priced home–are all in California. In the Anaheim metro, which encompasses Orange County, a household would need to earn $135,554 per year to afford the typical home. That’s more than double the area’s median household income of $65,331. The story is similar in San Jose, where a household would need to earn more than $215,000 annually to afford the typical home. That’s more than double San Jose’s median household income. Next come Los Angeles and San Diego, where households need to earn 186 percent and 156 percent of the areas’ median household incomes to afford the typical home.
The Most Affordable Metros
It’s followed by western New York’s Rochester and Buffalo, along with Dayton, Ohio. There are places where families need to earn about $30,000 annually–only about half of each area’s median household income–to buy the typical home. Rounding out the top five is Pittsburgh, where households need to earn just over $30,000–much less than the area’s median income–to purchase a median-priced home.
Wealth vs. Quality of Life
“People who live in places like Detroit, Pittsburgh and Cleveland tend to earn lower salaries than people in expensive coastal areas, but in many ways, the Midwesterners’ quality of life is better. Even though they may make less money, it’s easier to purchase a home and build equity while providing for a family,” said Redfin chief economist Daryl Fairweather. “It’s no secret there’s an affordability crisis in high-priced places like the Bay Area, where modest homes can sell for well over $1 million. But in most of the country, homes are still affordable on the typical local income. That’s one reason people are looking to move to places like Phoenix, Atlanta and Las Vegas, where homes are affordable on realistic incomes.”