The Most Unaffordable Places to Live in the U.S.

Believe it or not, the most unaffordable places to live in the U.S. are not San Francisco or Manhattan; it’s actually Brooklyn.

Someone who ears the average salary in Brooklyn simply cannot afford the average home there. If they spent their complete and entire salary (with a little extra) on housing they still would fall short on the scale of affordability.

A real estate firm known as RealtyTrac, took a survey last week of 417 of the most populated cities across the country, and combined the average wage data from the Bureau of Labor Statistics. The second and third place cities go to Marin County, California, and Santa Cruz California. Living in both of those places requires the complete salary devoted to their median home, and you still can’t technically afford to live there.

A lot of the times people are priced out of cities like San Francisco,  Manhattan, and San Jose, so they choose to move to Brooklyn, Marin, etc. which is making the prices of homes there sky rocket. While people continue to move into these emerging cities, wages aren’t rising nearly as fast, creating the unaffordability problem. Keep in mind that home prices are still more expensive in cities like San Francisco, Manhattan, but so are the wages.

About one in five markets are unaffordable, which means that a median priced home was less affordable in those cities than the historically normal level for that city as far back as 2005.

Across the country the average person owning the average home would need to spend about 35 percent of their income to afford the home. Clearly this number is higher than what Uncle Sam says it should be, but it’s still way less than places like Marin and Santa Cruz.

Uncle Sam says a maximum of 30 percent of your take home pay should be spent on housing, or your risk having a difficult time affording your home, and other necessities like food and clothing etc. But when was the last time the government knew how to spend other people’s money responsibly?

Even though they are being called unaffordable, it doesn’t mean people aren’t moving there. More homes were sold in the first quarter of 2016 in these cities than in the same quarter of 2015. Brooklyn, Marin, and the like continued to outperform their neighboring cities price wise since the beginning of 2015.

The term “affordability” is improving as home price appreciation is slowing; wage growth is accelerating, and falling interest rates. Let’s see what the future holds for real estate, and hope for the best! 

Here are the ten most unaffordable places to live in America and the percent of average wages required to buy a home in the area:

1. Brooklyn N.Y. - 121.70%

2. Marin County, CA - 118.10%

3. San Cruz, CA - 113.50%

4.San Francisco, CA - 94.60%

5.Maui, HA - 92.80

6.San Luis Obispo, CA - 90.40%

7.Napa, CA - 86.90%

8.Monterey, CA - 84.50%

9.Queens, N.Y. - 83.60%

10.Sonoma, CA - 82.10%

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