The American Counties Where Local People Can’t Afford a Home

By Douglas A. McIntyre Published Aug 25, 7:30AM EDT

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The American Counties Where Local People Can’t Afford a Home — © csfotoimages / iStock Editorial via Getty Images

The real estate market in the United States is on fire for several reasons. One is that many people have decided to relocate from the expensive cities on the coasts, particularly New York City and San Francisco. More and more people can work from home because of the effects of the COVID-19 pandemic. Some have elected to move to places they believe have a better quality of life and lower living expenses. Mortgage rates have hovered near multidecade lows as well.

Prices across the country are up by double digits. The carefully followed S&P Case-Shiller home index showed that, nationally, home prices rose 16.6% in May, compared to the same month a year ago. This is a record since Case-Shiller first published its data 20 years ago. In Phoenix, home prices rose over 20% over the same period.

Tight inventory has pushed home prices even higher. Bidding wars for homes have become commonplace in some towns. The average time a house for sale is on the market can be only a few days.
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One disadvantage to the run-up in prices is that people who have lived in cities and towns for a long time are being priced out of the market by new homeowners. These residents find they may not even be able to stay. Realtor.com has just published a study about the affordability problem titled “Priced Out: 10 Hot Spots Where Locals Are Least Likely to Be Able to Afford a Home.” Explaining this new problem for local residents, Ali Wolf, chief economist at real estate research firm Zonda, commented:

Those relocating while continuing to work from home are often bringing a higher wage and some home equity with them. This has helped pushed home prices up far faster than the growth of local incomes.

The county where this problem is the worst is among the most expensive real estate markets in America. The median list price for a home in Santa Barbara County, California, is $1.7 million. From the end of 2019 to the end of 2020, that number rose by 65.5%. The change in wages for the area was only 7.6%.

Santa Barbara was followed by Gallatin County, Montana, home to Bozeman. Many people from the expensive cities on the west coast have moved there. The median price of listed homes in the county has risen 65% over the measured period to a median price of $979,900. However, the increase in wages is only 18.3%.

Here are the 10 hot spots:

Santa Barbara County, California
Gallatin County, Montana
Richmond County, Georgia
Jones County, Mississippi
Jefferson County, Arkansas
Belmont County, Ohio
Potter County, Texas
Carter County, Tennessee
Pike County, Pennsylvania
Watauga County, North Carolina

Click here to see which county has the most expensive homes in America.
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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.