This Bay Area city is the least affordable in the world to buy a home: study
Housing in San Jose, California, US, on Thursday, Sept. 5, 2024. Photographer David Paul Morris/Bloomberg via Getty Images
SAN JOSE, Calif. - A new analysis of home price affordably found that the city with the least affordable housing market in the world was in the Bay Area.
The findings, by online money transfer service Remitly, identified San Jose as the world's most expensive and hardest to break into the property ladder.
"With sky-high prices, even for modest sized properties, many buyers struggle to afford a home of their own, despite strong local incomes," the site noted as part of its findings.
According to the analysis, a couple pooling their money, each earning the local average salary, would barely be able to afford half of the average home cost.
Remitly identified that the average salary to be $86,605 in San Jose.
It calculated that a single buyer could afford only about 27% of an average property.
"This could mean they would have to stretch themselves financially, often finding larger down payments or asking for financial help from family to be able to make their dream of owning a home a reality," Remitly researchers said.
Remitly did not provide averages for home prices in specific cities, but data from online real estate marketplace Zillow puts the current average in San Jose at about $1.38 million.
California cities top least affordable list
California cities took the top spots in the global rankings. In fact, half of the world's top 10 most expensive cities for housing were located in California.
SEE ALSO: Most buyer-friendly housing markets in 2026, according to Zillow
Los Angeles was identified as the second least affordable. Couples earning the local average salary, calculated at $60,656, would only be able to afford about 56% of the average home, 28% for single buyers.
Long Beach came in third with single buyers, who earned the average income able to afford less than a third (31.7%) of the average home.
San Diego was the fourth least affordable, with that figure coming at 33% for single buyers.
Other Bay Area cities
San Francisco:
Further down the rankings, San Francisco came in as the world’s tenth least affordable city for homebuying.
"With limited housing development, coupled with soaring demand, property prices have been driven up to become some of the highest in the country," the study said. "Despite high local salaries of an average of $110,581, our study shows that a single buyer with average earnings could only afford 39% of an average property."
A couple's combined earnings would afford them 77% of an average property, figures showed.
Zillow puts the average home value in San Francisco at almost $1.27 million.
Remitly said that homeownership in the City by the Bay is out of reach for a good number of its residents.
"With average properties costing so much, a lot of residents are forced into long-term rental agreements or are forced to leave the city in search of more affordable living," researchers said.
Oakland:
Oakland came in 19th place. Figures showed that a single buyer in the East Bay city could afford about 47% of an average home. For couples, it was 94%.
The average home value in Oakland is about $687,000, according to Zillow.
Dig deeper:
While U.S. cities occupied most of the 10 top slots on the least affordable list, Europe and Canada were also represented.
World's top least affordable
1. San Jose
2. Los Angeles
3. Long Beach
4. San Diego
5. Vancouver, Canada
6. Paris, France
7. Porto, Portugal
8. New York City
9. Miami
10. San Francisco
19. Oakland
Dig deeper:
The analysis involved data from 151 cities across 11 countries.
The U.S. was represented by 50 of its largest cities by population.
The analysis focused on the proportion of the average home affordable to the average owner, pulling from data including the U.S. Census Bureau and Neilsberg Research, which also tracks median household income.
The research did not take into account property taxes, Remitly said, "as they vary significantly between locations and could introduce inconsistencies."
World's most affordable is in the U.S.
With San Jose and other California cities on one end of the spectrum, by contrast, Detroit was identified as the world’s most affordable city.
There, the average single earner "can comfortably afford a home of their own," researchers said. And couples can afford almost five times the average property price.
"As Michigan’s largest city, the cost of living is much lower here compared to other areas of the country, which is also reflected in the low average house price of around $78,973," Remitly said.
No other U.S. city made the list of the world’s top 10 most affordable cities to buy a home.
When the list was narrowed down to the top 10 most affordable cities in North America, California failed to show up.
Top 10 most affordable in North America
- Detroit
- Memphis
- Baltimore
- Oklahoma City
- Kansas City
- Philadelphia
- Milwaukee
- Indianapolis
- Tulsa
- Minneapolis
Bay Area poverty on the rise, new data shows
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