Homes in most major markets—including Seattle—are unaffordable to median earners

Of the top 50 housing markets in the U.S. only three (all in the Midwest) are considered affordable for median earners, according to Realtor.com. In its analysis, the listings website used the industry threshold that no more 30% of a household’s income is spent on buying and owning a house.

In Seattle, owners would need to pay 56.3% of the median income ($113,456) to buy a median list priced of home ($799,000) according to Realtor.com’s data for May).

For the US overall, it would take 44.6% of median household income.

The research showed that only Pittsburgh, Detroit and St. Louis met that 30% rule. Cleveland and Indianapolis came in at 32% and 33.2% respectively. The comparison of metro areas showed a range of 27.4% (in Pittsburg) to 104.5% (in Los Angeles-Long Beach-Anaheim).

Three of the five least affordable markets are in California. The others are New York and Boston. On average, 48.3% of households in these five metros rent instead of own. Nationally, the figure is about 35%

“Fewer households are buying and more households are staying put because maybe they can afford their current housing costs,” said Hannah Jones, senior economic research analyst at Realtor.com. It’s not just housing costs, she noted, explaining the overall cost of living has escalated significantly. Property taxes and homeowner insurance were cited as examples.

“That 30% rule is just not attainable in most of the country,” Jones stated, adding, “That’s a big reason why we’re not seeing a lot of buyers in the market.”

A report released by Harvard University’s Joint Center of Housing Studies (JCHS) found that a buyer needs to earn at least $100,000 in 53% of all metro areas to afford a median-priced home. That’s a significant jump from the 2021 figure of 11%.

Increasing supply is one remedy, analysts say. Many builders are building smaller homes to boost affordability. Offering creative financing solutions like rate buydowns is another strategy, Jones said. Panelists at a JCHS panel emphasized there isn’t one single solution to fix the housing crisis.

“We tend to talk a lot about new construction and the cost of new construction, and a lot goes into that: land, zoning, the cost to build the structure, the cost of financing, operating cost,” said Chris Herberg, managing director of the Harvard center. “You’re not going to solve the affordable-housing problem from solving one thing. Zoning reform is important, but it won’t solve the problem by itself. We have to think about it in a broad complex way.”