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Potential buyers know the difficulty of finding an affordable home, and not just in the United States. A new report ranks the global cities where this issue is the worst – including the top five most "impossibly unaffordable" U.S. metros.
The annual Demographic International Housing Affordability report, which has analyzed housing costs for two decades, lists both the top 10 most unaffordable places – as well as the most affordable housing markets.
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The rankings were based on survey results from 94 major markets across eight countries (Australia, Canada, China, Ireland, New Zealand, Singapore, the U.K. and the U.S.) in the third quarter of 2023. The report measures housing affordability using a figure called "median multiple," a price-to-income ratio that divides the median house price by the median household income.
The markets are categorized based on their median multiple into five groups: "Affordable" (3.0 and under), "Moderately Unaffordable" (3.1 to 4.0), "Seriously Unaffordable" (4.1 to 5.0), "Severely Unaffordable" (5.1 to 8.9) and "Impossibly Unaffordable" (9.0 and over).
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Here’s what the report found:
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In the U.S., the report named the most affordable housing market as Pittsburgh, Pennsylvania.
Here are the top 10, according to the report.
- Pittsburgh, Pennsylvania (3.1)
- Rochester, New York (3.4)
- St. Louis, Missouri (3.4)
- Cleveland, Ohio (3.5)
- Edmonton, Canada (3.6)
- Buffalo, New York (3.6)
- Detroit, Michigan (3.6)
- Oklahoma City, Oklahoma (3.6)
- Cincinnati, Ohio (3.7)
- Louisville, Kentucky (3.7)
Top 10 ‘impossibly unaffordable’ cities, according to report
The least affordable market in the English-speaking world last year was Hong Kong, according to the report.
In the U.S., there were five cities that made the list – mostly on the West Coast.
Here are the top 10 cities dubbed "impossibly unaffordable" worldwide:
- Hong Kong (16.7)
- Sydney, Australia (13.3)
- Vancouver, Canada (12.3)
- San Jose, California (11.9)
- Los Angeles, California (10.9)
- Honolulu, Hawaii (10.5)
- Melbourne, Australia (9.8)
- San Francisco, California (9.7)
- Adelaide, Australia (9.7)
- San Diego, California (9.5)
- Toronto, Canada (9.3)
Why so unaffordable?
According to the report, an increase in remote work during the pandemic fueled a demand for housing – particularly in "suburban, exurban and even more remote areas."
"The result was a demand shock that drove house prices up substantially, as households moved to obtain more space, within houses and in yards or gardens," the report states.
It also blames the affordability issue on "urban containment policies," which it says are designed to "limit sprawl and increase density" in such areas.
"While well-intentioned, these policies severely constrict the land available for housing," the report says. "In constrained markets, higher land values translate to dramatically higher house prices."
This story was reported from Cincinnati.