Although America has 50 states, when you look at housing affordability you can more effectively split the U.S. as California versus everyone else.
According to Freddie Mac’s latest U.S. Economic & Housing Outlook for February, Frank Nothaft, Freddie Mac vice president and chief economist, said, “Rising home prices and interest rates along with little-to-no income growth has resulted in a substantial erosion of homebuyer affordability over the past year.”
“Therefore, jobs and income growth are necessary for 2014 to turn in another gold-medal performance for the housing recovery," he added.
The enterprise included an interactive graphic showing housing affordability across America.
For this article's purpose, I followed the boundaries of a 4.29% mortgage rate, 10% down payment, 2.18% taxes and insurance, no change in expected income and no change in house price index. However, all of these elements are interchangeable.
So are you in an unaffordable market? If you live in California, or anywhere in the West coast, the answer is likely a yes.
Click below to access the 5 most affordable and unaffordable housing markets.
5 most unaffordable:
5. Los Angeles (pictured above)
This California city ranks at 54 on the affordability index, with a current median house price of $423,000 and an average monthly payment of $2,651 required.
4. San Diego
This city boasts an affordability index of 50, with a current median house price of $477,000 and $2,987 monthly payment required.
3. San Jose, Calif.
Making it into the top 3, San Jose records an affordability index of 47, in addition to a current median house price of $775,000 and a monthly payment of $4,856 required.
2. San Francisco
San Francisco is closely behind the No. 1 city and recorded a 42 affordability index, $682,000 median house price and $4,275 monthly payment required.
This is the only city not located in California and is also the top unaffordable market. Honolulu ranks 41 on the affordability index, with a current median house price of $671,000 and an average monthly payment of $4,203.
5 most affordable:
5. Fort Wayne, Ind.
With an affordability index of 182, this city’s median house price hits $102,000 and requires a monthly payment of $640.
4. Peoria, Ill.
This city recorded a 191 on the affordability index, $112,000 median house price and $640 monthly payment requirement.
3. Springfield, Ill.
As the capital of Illinois, Springfield posted a 198 affordability index, $105,000 median house price and $660 monthly payment requirement.
2. Toledo, Ohio
Coming in at number two, Toledo hit a 208 affordability index, $81,000 median house price and $504 monthly payment requirement.
1. Rockford, Ill. (pictured above)
If you live in Rockford, you are in luck. The city holds a 227 affordability index, $81,000 median house price and $510 monthly payment requirement.