For the typical middle-class household, owning a home is highly achievable, just as long as they choose to live in the Midwest.
In the middle of the country, the average household can afford to live in at least 80% of the homes on the market. But move to San Francisco, Orange County, Los Angeles, New York and San Diego and fewer than 30% of middle-class households can afford properties,Trulia noted.
"For the middle-class today, homeownership is well within reach in some parts of the country, but in others, it’s more of a pipe dream than the American Dream,” Jed Kolko, chief economist with Trulia, said. "Even after taking income differences into account, homeownership affordability varies hugely across the country."
The survey determined affordability based on whether the total monthly payment for that home was less than 31% of the metro’s median household income.
Chicago reigned in as the least affordable housing market, with only 14% of the homes for sale deemed as affordable. Additionally, the average size of a house in October was 1,000 square feet.
Comparatively, Akron, Ohio, ranked as the most affordable housing market, with 86% of the listed homes classified as affordable.
"Even though the median household income is 60% higher in San Francisco than in Akron – which means San Franciscans can afford more expensive homes – the median price per square foot in San Francisco is close to seven times higher than in Akron," Kolko said. "As a result, just 14% of the homes for sale in San Francisco are within reach of its relatively well-paid middle class."
However, Nicolas Retsinas, a member of the Bipartisan Policy Center Housing Commission, said when it comes to taking out a larger mortgage, credit access is becoming a larger issue.
"We have historically low interest rates, but we all expect interest rates to drift upward," he noted. It will be difficult, no matter what the price is, to get a mortgage if there is not enough access to credit, Retsinas added.
Furthermore, Kolko noted that affordability also is declining because home prices are rising faster than median incomes — not to mention, the recent uptick in mortgage rates.
Although home prices vary across the nation, Retsinas says rising interest rates would proportionally impact America, making it difficult for most first-time homebuyers to own a home.