2 Bay Area cities have among world's most ‘impossibly unaffordable’ housing markets: report

SAN JOSE, Calif. - Two Bay Area cities have been identified as having housing markets that are among the most "impossibly unaffordable" in the world. 

The findings were released in a report by Chapman University in Orange County and Canadian think-tank Frontier Centre for Public Policy. 

Researchers assessed housing affordability in 95 major markets around the globe and placed San Jose’s and San Francisco’s in the top 10 for least affordable.

San Jose was ranked third, and San Francisco came in eighth.

In all, researchers said they found 12 cities in eight nations that fell in the report’s category of having "impossibly unaffordable" markets.

‘Impossibly unaffordable’

Among those 12, California cities occupied four spots. Los Angeles, (5), and San Diego (8), also held the dubious distinction.

1. Hong Kong
2. Sydney, Australia
3. San Jose
4. Vancouver, Canada
5. Los Angeles
6. Adelaide, Australia
7. Honolulu
8. San Francisco 
9. Melbourne, Australia
10. San Diego
11. Brisbane, Australia
12. Greater London, U.K.

‘Existential threat’ to middle-class

The report said the housing markets in those cities deemed "impossibly unaffordable" represented an existential threat to middle-income households.

Researchers noted, historically, in high-income countries, middle-income homeownership was more prevalent, with home prices more aligned with household incomes. 

"Since the 1990s, however, prices have surged—especially in markets governed by urban containment strategies early (e.g., San Francisco, Sydney, London) —with homes now costing 9–15 times household income," the 2025 Demographia International Housing Affordability report said.  

The shift, researchers said, was linked to planning programs that restrict urban expansion through greenbelts and other zoning policies.

"Middle-income households are increasingly leaving expensive markets for more affordable places," the report said, adding, "People are ‘voting with their feet,’ to obtain the housing denied them in markets with deteriorated housing affordability."

Researchers projected that this migration from major cities would continue without major policy reforms. 

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The report broke down housing affordability by five categories: affordable, moderately unaffordable, seriously unaffordable, severely unaffordable, and impossibly unaffordable.

To rate the cities, researchers used the median multiple, defined as a price-to-income ratio that divides the median house price by the median household income.

"The term ‘impossible’ was selected to convey the extreme difficulty faced by middle-income households in affording housing at a median multiple of 9.0," researchers said, adding, "This level of unaffordability did not exist just over three decades ago."

‘Most affordable’

On the other side of the rankings, U.S. cities made up many of the top "most affordable" housing markets among the 95 major metropolitan markets analyzed.

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For the fifth year in a row, Pittsburgh, Pa., was designated as the number one most affordable.

Researchers noted that San Jose, with the least affordable housing market in the U.S. was four times as costly as Pittsburgh.

The report is in its 21st edition, and researchers said the annual analysis has "robustly documented" what it called the deterioration of housing affordability.

Researchers said housing costs play a major role in the financial struggles faced by many families. 

"Because housing is usually the most expensive element of household budgets, this deterioration has been the principal driver of the present cost of living crisis affecting the middle and working classes," said Frontier Centre for Public Policy President David Leis, who added, "There is a genuine need to substantially restore housing affordability in many markets throughout the covered nations."