Report Finds Only Two US Housing Markets Remain Truly Affordable
Housing prices generally align with local income levels, with higher earning areas typically seeing more expensive home prices and low-income areas typically having more affordable homes. However, this trend isn’t consistent across the U.S. In some cities, people earning the median income are still unable to afford the median-priced home in their area.
According to real estate agency platform Clever Real Estate, only two of the 50 largest metro areas in the U.S.—Detroit and Pittsburgh—have median incomes high enough to comfortably cover the cost of a median-priced home.
In Detroit, the median household income is $72,574, which is about $5,000 less than the national median of $77,719. However, the median home price is just $195,000, less than half the national average of $438,000. That income could actually support a home purchase of up to $234,018, nearly $40,000 more than the city’s median home price.
Pittsburgh shows a similar trend. With a median income of $72,532, which is close to the national figure, the median home price is $250,000. The typical household earns just enough to afford a home priced at $254,617, slightly above the local median.
While only two cities are truly affordable to local households, other cities come close
Philadelphia is close to being truly affordable for local residents. With a median income of $86,867—about 12% higher than the national median—households face a median home price of $290,000. While this is well below the national median home price, Philadelphia households earn just $864 less than the income needed to afford the area’s median-priced home, putting affordability within reach.
Likewise, in Cleveland, the median household income of $67,586 is just $1,564 less per year than what's needed to buy the median-priced home of $235,000.
But how does affordability look on a nationwide scale?
To afford the median-priced U.S. home of $438,000, buyers need an annual income of $123,226. This estimate assumes total housing costs equal 28% of income, with a 20% down payment and a 6.65% mortgage rate.
However, this is not the case for most Americans. The median household is only making $77,719 per year, leaving most households short about $45,507.
Affordability varies drastically across the U.S., but some areas have consistently been touted as more affordable options
- The 5 Most and 5 Least Affordable US Housing Markets: In Q4 2023, the most affordable housing markets were in MIdwestern states, such as Michigan and Ohio.
- 10 Most Affordable States to Purchase a Home: In 2024, a report from Redfin named Iowa as the most affordbale state to purchase a home, followed by Oklahoma and Ohio.