According to the latest housing report released by the real estate website Realtor.com, Los Angeles ranks last in affordability and new home construction performance among the top 100 metropolitan areas in the United States. The report highlights the significant pressure faced by local residents in purchasing homes due to high prices and insufficient new housing supply.
The real estate platform published its first “Metropolitan Affordability and Housing Construction Assessment Report” on September 16, evaluating the top 100 metropolitan areas in the U.S. based on two main aspects: the affordability of current homes for local income earners and the pace of new home construction to meet future demands.
Los Angeles-Long Beach metropolitan area scored only 12 points, ranking at the bottom (100th) among the 100 metropolitan areas. The affordability score was a mere 0.9, while the new home construction score was 23.1, both factors contributing to its low overall ranking.
The median listing price for homes in Los Angeles is around $1,129,415, while the median household income is approximately $91,380. Assuming a homebuyer pays a 10% down payment and calculates with a 6.5% 30-year fixed mortgage rate, a buyer with an income at the local median would spend 84.4% of their income on monthly mortgage payments.
Generally, housing affordability is measured when housing expenses do not exceed 30% of income. To reduce monthly payments to that level, a buyer would need to pay around 68% as a down payment, roughly $768,000.
In addition to high prices, Los Angeles also faces a shortage of housing supply. Realtor.com measures housing construction speed with the “building permits per capita” ratio. Los Angeles’ ratio is only 0.47, indicating that the number of new housing construction permits per resident is less than half of the national average.
The report attributes the city’s bottom ranking to the combination of high housing costs and inadequate new home supply.
Apart from Los Angeles ranking at the bottom, other metropolitan areas with low affordability include:
On the flip side, at the top of the list, the capital city of Iowa, Des Moines, received an “A+” rating with a score of 83.4, ranking first among the analyzed 100 metro areas, reflecting strong residential construction activity and good housing affordability in the city.
The city’s median listing price for homes is $349,903; for households at the median income, monthly mortgage payments account for 27.5% of income, below the usual threshold of 30%.
Raleigh, North Carolina, ranked second with an A+ rating and a total score of 82.8; Columbia, South Carolina, ranked third with a score of 75.3.
The top ten metropolitan areas in housing affordability include:
Regionally, the South and Midwest show the best performance in new home construction and housing affordability, while the Northeast and West lag behind comparatively.
The report attributes this difference to the greater and cheaper land availability in the South and Midwest, along with more flexible zoning and approval policies.
Realtor.com points out that the U.S. currently faces a housing supply gap of over 4 million units, causing economic pressures for first-time homebuyers.
Chief Economist at Realtor.com, Danielle Hale, emphasizes the interconnectedness of housing construction and affordability, stating that increasing housing supply is essential for long-term improvement in affordability.
According to a report jointly released by the National Association of Home Builders (NAHB) and Wells Fargo on September 16, the builder confidence index for September dropped to its lowest point since September 2025.
NAHB Chairman Bill Owens noted in the report that homebuyer foot traffic and sales have weakened in most parts of the country, primarily due to rising mortgage rates.
As per Freddie Mac data, the average interest rate for a 30-year fixed mortgage reached 6.95% in the week ending September 17, higher than the previous week’s 6.76% and 6.26% from a year ago.
Owens also highlighted ongoing challenges for builders, such as high material costs, rising energy prices, and persistent labor shortages.
NAHB’s Chief Economist, Robert Dietz, added that 42% of builders perceive the current availability of developable residential land to be “poor,” while another 38% think it is only “fair.”