Cities where the middle class can no longer afford a home
According to the U.S. Department of Housing and Urban Development, families that pay more than 30% of their incomes on housing are considered cost burdened and may have difficulty affording rent as well as other necessities such as food, clothing, transportation, and medical care. While the poorest families are the most likely to be housing-cost burdened, skyrocketing home prices in U.S. metropolitan areas have caused the nation’s housing affordability crisis to spread to a large number of middle class Americans. While the housing cost burden for low-income households is often offset through housing subsidies, there are few forces protecting middle-income households from the rising cost of real estate. Fast-growing cities with high construction costs and low housing inventories have experienced some of the sharpest spikes in home prices over the past several decades, and today these cities have some of the largest shares of cost-burdened middle-class households. To determine the cities where the middle class can no longer afford a home, 24/7 Wall St. reviewed the share of households earning $45,000 to $74,999 annually that spend at least 30% of their incomes on housing in the 100 largest U.S. metropolitan areas. Data came from “The State of the Nation’s Housing 2018” report of the Joint Center for Housing Studies of Harvard University. There are 20 metro areas in which more than 30% of households in the income bracket spend at least 30% of their incomes on housing. Definitions of the middle class vary by housing organization and geography. Nationwide, the middle 20% of U.S. households earn between $45,325 and $72,384, roughly in line with the $45,000-$74,999 breakout provided by the JCHS. While the incomes earned by the middle class of earners varies by city to city, the $45,000-$74,999 range was used throughout this analysis as an approximation of the American middle class.
18. Baltimore-Columbia-Towson, MD • Cost-burdened middle-class households: 33.7% • Median single-family home value: $258,343 • Median household income: $76,788 • Homeownership rate: 65.3% Just over one in every three households with annual earnings between $45,000 and $74,999 in the Baltimore metro area are housing-cost burdened. Some 6.3% of households in the same income range are severely burdened -- spending over half of their income on housing. For reference, 3.9% of middle-class households nationwide spend over half of their income on housing. Property values are climbing rapidly in the Baltimore metro area. The median home price was 40% higher at the end of 2017 than it was at the end of 2000, a greater increase than in the vast majority of U.S. metro areas. While Baltimore suffers from an apparent shortage of middle-market housing options, there is an even more limited supply of affordable housing for low-income residents. Some 57.5% of metro area households earning between $30,000 and $44,999 are housing-cost burdened, well above the 42.6% comparable share nationwide.
17. Portland-Vancouver-Hillsboro, OR-WA • Cost-burdened middle-class households: 33.9% • Median single-family home value: $379,891 • Median household income: $68,676 • Homeownership rate: 61.7% Rapid population growth in the Portland-Vancouver-HIllsboro metro area over the past several years has led to higher home prices, which made the city far less affordable for a number of middle class residents. The population of Portland grew by 7.2% from 2011 to 2016, nearly twice the 3.7% national growth rate for the same period. The median home value in the metro rose 65.6% from $229,404 in 2000 to $379,891 in 2017, the largest percentage increase of any U.S. city. Today, some 33.9% of households earning between $45,000 and $74,999 a year in the Portland metro area spend at least 30% of their incomes on housing, far more than the 22.0% of middle-income households nationwide who are housing-cost burdened and one of the largest shares in the country. ALSO READ: States With the Most Gun Violence
15. Sacramento--Roseville--Arden-Arcade, CA Avg. hourly wage, waiters: $14.73 No. of waiters: 15,510 (16.99 per 1,000 jobs) Cost of living: 2% greater than nat'l avg. No. of full-service restaurants: 1,655 (top 10%)
15. New Haven-Milford, CT • Cost-burdened middle-class households: 34.2% • Median single-family home value: $201,182 • Median household income: $66,176 • Homeownership rate: 61.2% New Haven is one of several metro areas in Connecticut in which home prices remained essentially flat throughout 2017. Additionally, the median home price in the city was about 30.3% lower as of the end of 2017 from its peak in the 2000s. The city also has some of the largest housing inventories in the country. The drop in home prices and the large share of homes on the market are due in part to population decline. The metro area's population fell by 0.5% from 2011 to 2016, even as the U.S. population grew by 3.7%. Despite the relatively favorable conditions for buyers, housing costs remain a considerable burden for 34.2% of middle-income households. By comparison, 22.0% of middle-income households nationwide are housing-cost burdened. Low-income residents are even more likely to be affected. Some 61.8% of households earning between $30,000 and $44,999 a year are considered housing-cost burdened. ALSO READ: States With the Longest and Shortest Life Expectancy
14. Denver-Aurora-Lakewood, CO • Cost-burdened middle-class households: 34.8% • Median single-family home value: $385,017 • Median household income: $71,926 • Homeownership rate: 63.8% The population of the Denver-Aurora-Lakewood metro area increased by 9.7% from 2011 to 2016, nearly three times the national population growth of 3.7% during that time. The increased demand for housing in Denver, as well as high construction costs, have created a housing crunch that has been particularly hard on middle-income households. According to real estate research firm Metrostudy, just 1% of listed homes cost less than $300,000, which has forced many middle class families to purchase a home outside of their budget range. The size of the average mortgage payment in Denver has increased by 20.5% over the past 10 years, the largest increase of any U.S. city. Some 34.8% of households earning between $45,000 and $74,999 a year spend at least 30% of their incomes on housing, one of the largest shares nationwide.
No. 6. Fort Lauderdale Beach, Fla. With miles of sun kissed beachfront and an easy walk from many hotels, restaurants and activities, Fort Lauderdale Beach is a favorite among travelers. Families often rave about the beach’s cleanliness, warm water, on duty lifeguards, and beautiful palm trees. “Nice place to enjoy the Atlantic breezes and take in the sun rays. It is beautifully maintained and very clean. Also there are many establishments across the boulevard where you can have food and drinks,” wrote a TripAdvisor reviewer.
• Beachfront bargain hotel nearby: Snooze, from $240 per night on TripAdvisor
• Great airfare found on TripAdvisor: As low as $99 round-trip from ATL (Atlanta) to MIA (Miami)
12. Seattle-Tacoma-Bellevue, WA • Cost-burdened middle-class households: 39.4% • Median single-family home value: $472,907 • Median household income: $78,612 • Homeownership rate: 59.5% Many cities in which the middle class struggles to afford homes are growing rapidly -- and the Seattle metro area is no exception. The metro area's population grew by 8.5% from 2011 to 2016, more than double the 3.7% national population growth over that time. Housing costs climbed faster than incomes over the same period. Currently, 39.4% of middle-class households in the area spend at least 30% of their incomes on housing. This overspending on housing is largely due to a lack of affordable options. The typical home in the Seattle-Tacoma-Bellevue metro area is worth $472,907, the sixth highest median home value of the 100 largest metro areas in the country.
11. Riverside-San Bernardino-Ontario, CA • Cost-burdened middle-class households: 42.3% • Median single-family home value: $349,689 • Median household income: $58,236 • Homeownership rate: 61.1% California has some of the most expensive real estate in the country, and Riverside-San Bernardino-Ontario is one of eight metro areas in the state where a large share of middle-income households struggle to afford their homes. Of all households earning between $45,000 and $74,999, 35.3% spend between 30% and 50% of their income on housing, and 7.0% spend over half of their income on housing. Home values are climbing rapidly in the metro area. The median monthly mortgage payment in 2017 was $2,201, up 77.6% from five years prior. Nationwide, the median mortgage payment climbed by 41.4% over the same period. High housing costs are also affecting renters. Some 56% in of renters in Riverside are housing-cost burdened -- the majority of whom spent over half of their income on rent. ALSO READ: American Cities With the Most Property Crime in Every State
9. Washington-Arlington-Alexandria, DC-VA-MD-WV • Cost-burdened middle-class households: 47.5% • Median single-family home value: $393,206 • Median household income: $95,843 • Homeownership rate: 62.4% From 2011 to 2016, the population of the Washington-Arlington-Alexandria metro area increased by 7.5%, more than double the national population growth rate of 3.7% over that time. Like in many of the country's major cities, the influx of new residents created demand for high-end, upper-market housing options, ultimately reducing the number of housing options available to the city's low- and middle-income families. The scarcity of middle-market housing options has forced many middle-income families to spend more than the recommended share of their incomes on rent or a mortgage. Some 47.5% of households earning between $45,000 and $74,999 a year spend at least 30% of their incomes on housing, more than twice the 22.0% national share of cost-burdened middle class households. ALSO READ: States Where Americans Are Paying the Most Taxes
7. Los Angeles-Long Beach-Anaheim, CA • Cost-burdened middle-class households: 50.8% • Median single-family home value: $631,007 • Median household income: $65,950 • Homeownership rate: 47.4% One factor contributing to climbing home prices in Los Angeles is the slow pace of new home construction. The average time to issue a building permit in Los Angeles is longer than eight months, compared to four and a half months in the typical U.S. metro area. New home construction in Los Angeles from the period 1980 to 2010 was slower than new home construction in the United States as a whole. As a result, the supply of housing in Los Angeles is outstripped by demand. This has led to high home values and has priced many of the city's middle class residents out of the housing market. Just over half of households earning between $45,000 and $74,999 in the Los Angeles metro area spend at least 30% of their incomes on housing. ALSO READ: Cities Where Crime Is Soaring in Every State
6. Bridgeport-Stamford-Norwalk, CT • Cost-burdened middle-class households: 51.0% • Median single-family home value: $323,589 • Median household income: $90,123 • Homeownership rate: 65.3% While the median household income in the Bridgeport-Stamford-Norwalk metro area of $90,123 a year is the fourth highest of any U.S. metro area, income in the city is also more unevenly distributed than in nearly any other part of the country. The wealthiest 5% of households in Bridgeport earn 28.3% of all income in the city, the largest share of the 100 largest metro areas. Income inequality has been shown to affect rent burden. Today, some 51.0% of households earning between $45,000 and $74,999 in Bridgeport spend at least 30% of their incomes on housing, the sixth largest share of cost-burdened middle-class households of all metro areas.
11. Hawaii: Urban Honolulu • Premature death rate: 270.3 per 100,000 • Adult obesity rate: 22.2% • Rate of uninsured people under 65: 4.4% • Median household income: $80,513 Urban Honolulu beat out the only other metropolitan statistical area in Hawaii -- Kahului-Wailuku-Lahaina -- for the spot as the healthiest in the state, though both are among the healthiest in the U.S. Workers in Urban Honolulu are among the most likely to be employed, likely contributing to their overall good health, as economic instability and poverty are often linked with poor health outcomes. The unemployment rate in the area is just 2.2%, the second-lowest in the country. The average adult in Urban Honolulu has 2.9 mentally unhealthy days and 2.9 physically unhealthy days per month -- both averages are among the ten best in the country. Some 4.4% of Urban Honolulu residents under the age of 65 are uninsured, one of the lowest rates anywhere in the country and less than half of the nationwide rate of 11.0%. This high rate of insured residents likely allows those in Urban Honolulu to treat medical problems more quickly and effectively than in many other places nationwide.
3. Oxnard-Thousand Oaks-Ventura, CA • Cost-burdened middle-class households: 53.5% • Median single-family home value: $578,148 • Median household income: $80,135 • Homeownership rate: 62.1% Middle-income households are more likely to be burdened by housing costs in Oxnard-Thousand Oaks-Ventura than in nearly every other metro area in the country. Part of the reason is the limited supply of modestly priced homes. The majority of single-family houses in the metro area are worth over half a million dollars. Of all middle-income homes in the area, 41.2% spend between 30% and 50% of their incomes on housing, and 12.3% spend over half of their incomes on housing -- each more than double the corresponding national shares of 18.1% and 3.9%. Housing costs are are so high in the area that even higher earners are cost burdened. Nearly 16% of households earning at least $75,000 a year are cost burdened, more than double the 6.2% share of households nationwide in the same income range. ALSO READ: 19 Teams That Never Make the Playoffs
2. San Jose-Sunnyvale-Santa Clara, CA • Cost-burdened middle-class households: 54.7% • Median single-family home value: $1.2 million • Median household income: $110,040 • Homeownership rate: 56.6% Rapid income growth among tech sector elites in Silicon Valley has pushed home prices in the San Jose metro higher, forcing lower- and middle-income households to relocate or buy or rent housing far beyond their budget range. The median home value in San Jose rose from $778,356 in 2000 to $1.2 million in 2017, the eighth largest increase and now the highest median home price of the 100 largest U.S. metro areas. Some 54.7% of households earning between $45,000 and $74,999 a year spend at least 30% of their incomes on housing, more than double the 22.0% national share of cost-burdened middle class households and the second largest share of any metro area in the country, after only San Francisco.