In 2024, the independent research institution Creditnews Research recently conducted a study on the relationship between income distribution and housing costs in the top 100 most populous metropolitan areas in the United States, identifying areas where the middle class can most and least afford housing.
The income levels used in the report are based on the Pew Research Center’s economic strata household income percentile ranges: Lower middle class: $30,001 to $58,020; Middle class: $58,021 to $94,000; Upper middle class: $94,001 to $153,000.
Creditnews Research found that overall, middle-class families in parts of the Midwest and South are currently the most financially capable, while cities like San Francisco and New York, often considered super ideal coastal cities by many, are not. These places are not ideal choices even for wealthy buyers.
The research revealed that the most unaffordable metropolitan area for the American middle class is San Jose-Sunnyvale-Santa Clara. To buy a house in the San Jose area, an annual income of $468,252 is required – the highest among all 221 metropolitan markets surveyed by the National Association of Realtors in April.
Furthermore, according to Zillow data, the average home price in San Jose is $1,461,923, showing a 10.1% increase over the past year.
In contrast, Ohio offers the most affordable lifestyle for the American middle class. Due to incentives like grants and tax deductions for homeowners, three cities in Ohio have made it into the top ten according to Creditnews Research. Among them, Youngstown in Ohio is rated as the most affordable metropolitan area for the American middle class.
Buyers with incomes slightly over $40,000 qualify to purchase a typical home. The Ohio Housing Finance Agency states that Youngstown offers incentives to potential homebuyers, such as down payment assistance, graduate student subsidies, and discounted mortgage rates for public service residents.
According to reports from U.S. News & World Report, organizations like the Youngstown Community Development Corporation in Ohio are dedicated to revitalizing the urban communities in the area.
According to PayScale, the cost of living in Youngstown is 18% lower than the national average, with a median rent of $888.41. According to Zillow, the city’s average home price is $51,872, a 4.7% increase from last year.
Texas and Pennsylvania also have more than one metropolitan area in the top ten.
– Youngstown-Warren-Boardman, Ohio
– Toledo, Ohio
– McAllen-Edinburg-Mission, Texas
– Scranton-Wilkes-Barre, Pennsylvania
– Wichita, Kansas
– Pittsburgh, Pennsylvania
– Akron, Ohio
– El Paso, Texas
– Syracuse, New York
– Little Rock-North Little Rock-Conway, Arkansas
– San Jose-Sunnyvale-Santa Clara, California
– San Francisco-Oakland-Berkeley, California
– Los Angeles-Long Beach-Anaheim, California
– San Diego-Chula Vista-Carlsbad, California
– Honolulu, Hawaii
– Oxnard-Thousand Oaks-Ventura, California
– Seattle-Tacoma-Bellevue, Washington
– Boston-Cambridge-Newton, Massachusetts-New Hampshire
– New York-Newark-Jersey City, New York-New Jersey-Pennsylvania
– Bridgeport-Stamford-Norwalk, Connecticut
Creditnews Research warns in its report that the San Jose-Sunnyvale-Santa Clara metropolitan area faces the risk of becoming a “donut city” as rising costs lead to a “wave of outmigration of residents and businesses to the suburbs.”
The San Jose-Sunnyvale-Santa Clara metropolitan area is known for its connection to Silicon Valley, the home of tech giants like Zoom, PayPal, Nvidia, and Apple.
According to a 2023 doxo report, San Jose is also one of the most expensive large cities in the United States when calculated on a monthly basis. City residents pay an average monthly cost of $3,504, which is 71.2% higher than the national average.
Creditnews Research highlights in its report that due to San Francisco-Oakland-Berkeley’s reputation as a tech hub, the area is unlikely to become affordable for the American middle class anytime soon.
The Northern California metropolitan area is home to tech companies such as Meta, Salesforce, and Google.
(Adapted from CNBC report)