Applying the rule that no more than 30% of income should go toward housing, the study looked at the median listing prices in the 100 largest cities. GOBankingRates then calculated typical monthly mortgage payments as well as the income needed to afford a mortgage and compared this income to the number of households with income equal to or greater than that amount.
Boston followed San Francisco on the list, with 75.7% of households in the city unable to afford a home. The median listing price in Boston is $725,000. Following Boston were Miami (74.3%), Long Beach, Calif., (73.5%), and Los Angeles (72.9%). The cities have median listing prices of $450,000, $549,900, and $749,000, respectively.
With its high real estate prices, California had six of the top 10 cities with the highest percentage of households that cannot afford homes. In addition to San Francisco, Long Beach, and Los Angeles, San Jose, San Diego, and Oakland were among the cities with the highest percentages.
Additionally, the study revealed that a lower median home price does not necessarily translate to affordability. New Orleans has a median home price of $300,000, but the study found the city has the 10th highest percentage of households unable to afford a home. With lower wages, 64.5% of New Orleans households do not have the income needed to afford a typical mortgage.
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With its median home listing price of about $1.2 million, San Francisco has the highest percentage of households that cannot afford a home at 76.7%, a study by personal finance website GOBankingRates has found.