The US cities where it is ‘impossibly unaffordable’ to buy a home

The US cities where it is ‘impossibly unaffordable’ to buy a home

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Buying a home has become increasingly more expensive over the past two decades – especially in the United States.

It’s gotten so extreme that cities across the world are now categorized as ‘impossibly unaffordable.’

A new report from the Center for Demographics and Policy at Chapman University and the Frontier Centre for Public Policy compared average incomes with average home prices to identify the most expensive cities across the globe. 

The report found that pandemic-driven demand for homes with outdoor space, restrictive land use policies, and increased investor activity have all contributed to soaring prices.

The annual Demographic International Housing Affordability report, which has been tracking house prices for 20 years, labeled certain major cities as ‘impossibly unaffordable’ – with five being US cities, including three within the Golden State. 

San Jose, California

San Jose, located in the heart of Silicon Valley, tops the list of unaffordable cities in the US. The tech boom has driven up prices significantly - making home ownership too challenging for many

San Jose, located in the heart of Silicon Valley, tops the list of unaffordable cities in the US. The tech boom has driven up prices significantly – making home ownership too challenging for many

Average House Price: $1,370,000

San Jose, located in the heart of Silicon Valley, tops the list of unaffordable cities in the US. The tech boom has driven up prices significantly – making home ownership too challenging for many.

San Francisco, California

San Francisco, known for its iconic landmarks and booming tech industry, continues to be one of the most expensive places to buy a home in the US.

San Francisco, known for its iconic landmarks and booming tech industry, continues to be one of the most expensive places to buy a home in the US.

Average House Price: $1,290,000

San Francisco had a 9.7 median multiple (meaning the ratio of median home price to median household income). San Francisco, known for its iconic landmarks and booming tech industry, continues to be one of the most expensive places to buy a home in the US.

Los Angeles, California

Hollywood long-time allure and and the city's cultural diversity makes Los Angeles a desirable, but incredibly costly, place to live

Hollywood long-time allure and and the city’s cultural diversity makes Los Angeles a desirable, but incredibly costly, place to live

Average House Price: $915,000

Los Angeles was the second least affordable in the US (90th internationally), with a median multiple of 10.9, ranking, according to the report. Hollywood long-time allure and and the city’s cultural diversity makes Los Angeles a desirable, but incredibly costly, place to live.

San Diego, California

San Diego's beautiful weather and coastal location has driven up property values, placing it high on the unaffordability scale

San Diego’s beautiful weather and coastal location has driven up property values, placing it high on the unaffordability scale

Average House Price: $872,000

San Diego’s beautiful weather and coastal location has driven up property values, placing it high on the unaffordability scale. According to the report, the majority of the increase could be attributed to the shift to remote work.

Honolulu, Hawaii

Honolulu was the third least affordable, with a median multiple of 10.5 (89th internationally)

Honolulu was the third least affordable, with a median multiple of 10.5 (89th internationally)

Average House Price: $829,000

Honolulu was the third least affordable, with a median multiple of 10.5 (89th internationally). Honolulu, with its tropical climate and island lifestyle, is another market where high demand and limited space have pushed home prices to steep levels.

Vancouver, Canada

Vancouver is the least affordable city in Canada as well as the third least affordable of the 94 markets

Vancouver is the least affordable city in Canada as well as the third least affordable of the 94 markets

Average House Price: $1,255,000

Vancouver is the least affordable city in Canada as well as the third least affordable of the 94 markets. Outside of the US, Vancouver is known for its exorbitant housing costs, often compared with those of major US cities.

Sydney, Australia

Sydney has the least affordable market and is the second least affordable market internationally

Sydney has the least affordable market and is the second least affordable market internationally

Average House Price: $1,060,000

Sydney has the least affordable market, according to the report, with an impossibly unaffordable median multiple of 13.8. This brings it the second least affordable market internationally. 

Melbourne, Australia

Melbourne, with a 'impossibly unaffordable' average of 9.8, is the 88th least affordable of the 94 markets

Melbourne, with a ‘impossibly unaffordable’ average of 9.8, is the 88th least affordable of the 94 markets

Average House Price: $740,000

Melbourne, with a ‘impossibly unaffordable’ average of 9.8, is the 88th least affordable of the 94 markets. Melbourne joins Sydney in representing Australia on the list of unaffordable cities due to similar housing market pressures.

Hong Kong, China

Hong Kong remains the least affordable city worldwide, with a low home ownership rate of just 51 percent

Hong Kong remains the least affordable city worldwide, with a low home ownership rate of just 51 percent

Average House Price: $1,254,442

Hong Kong remains the least affordable city worldwide, with a low home ownership rate of just 51 percent. The city’s prices have been influenced by its compact geography and high demand. But interestingly, house prices in Hong Kong have actually slipped during the pandemic due to border closures and new national security laws. 

Toronto, Canada 

Toronto is the second least affordable market in Canada, according to the report

Toronto is the second least affordable market in Canada, according to the report

Average House Price: $1,100,000

Toronto is the second least affordable market in Canada, according to the report. Ranking 84th out of 94 markets in international affordability, with an impossibly unaffordable median multiple of 9.3, above its pre-pandemic median multiple of 8.6.  Toronto, like Vancouver, faces significant housing affordability issues, impacting many would-be homeowners.

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