Buying a home is likely the largest purchase most Americans will ever make. But while in some areas homeowners are more easily able to afford a house, in others they need to spend much more of their income on their house. A home’s affordability varies considerably depending largely on where the buyer lives, but also on a variety of other factors.

Real estate tracking firm RealtyTrac calculated income-to-price affordability ratios for 2,270 counties in the country. The affordability rate is the percentage of an estimated median household income that is needed to make monthly payments on a median-priced residential property in that area. Based on RealtyTrac’s data, San Francisco County, California, is home to the least affordable houses in the nation.

Most of the least affordable markets have been out of reach for most Americans for some time. Current affordability levels in all of the 10 least affordable counties are in line with, if not slightly lower than, historical figures. For instance, in New York County — more-commonly known as Manhattan — households have had to earn at least 75% of the median income for the last 15 years to cover the costs of homeownership, which includes mortgage payments, homeowner’s insurance and property taxes.

Click here to see the 10 least affordable housing markets in America

Click here to see the 10 most affordable housing markets in America

In some cases, residents of these areas are exceptionally wealthy. Notably, the median household income in Marin County, California was more than $90,000. Five more of the nation’s least affordable housing markets had median incomes in excess of $60,000, well above the U.S. median of $51,371 during that time.

Yet high median incomes were not present in all counties. Bronx and Kings Counties, also known as New York City’s Bronx and Brooklyn boroughs, are two examples. Both had median incomes below the nationwide median.

According to Daren Blomquist, vice president at RealtyTrac, in areas around Manhattan and San Francisco, so many people “want to live in a very small area that even the markets around that area will feel the ripple effect.” In all, six of the 10 least affordable counties are located in just two major metro areas: New York and San Francisco.

Additionally, these metro areas are among the nation’s wealthiest by economic output. As of 2012, the New York and Los Angeles metro areas, which together account for four of the least affordable counties, are the nation’s two largest metro areas by gross metropolitan product (GMP). All three areas with counties among the least affordable housing markets — New York, Los Angeles and San Francisco — are among the nation’s top metro areas by per capita GMP as well.

Of course, one of the major reasons that these markets are so unaffordable is simply the price of homes. In 2013, the City and County of San Francisco and Manhattan were the two most expensive housing markets in the nation by average home price. Marin and San Mateo counties, both neighboring San Francisco and among the least affordable housing markets, had the third- and fourth-highest average home prices.

Demand is a factor driving up prices in these areas. People move to to find jobs and access to certain amenities. “Buyers know that if you are going to move to a place like San Francisco, California. or Jackson Hole, Wyoming, you are going to pay more for the quality of life there,” he explained.

Limited supply will also have an impact on affordability. Blomquist said that both geographical and policy limitations can make a region less affordable. In Manhattan, for example, “there is a limited amount of space to build and a limited supply of homes,” as well as “some constraints in terms of zoning and growth policy.” In other areas, physical barriers like oceans or mountains can have a dramatic impact on housing prices.
One way to measure the relationship between high demand and limited supply — primarily for metropolitan counties — is to use population density metrics. A densely populated area will likely have a high demand for residential space. Six of the countries reviewed were among the 100 most densely populated in the U.S.. Bronx County, New York County, Kings County, and San Francisco County were all among the top five.

To identify the least affordable homes in America, 24/7 Wall St. reviewed affordability rates by county calculated by RealtyTrac for May 2014. The affordability rate is the percentage of the county’s estimated median household income needed to make monthly payments — on mortgages, property taxes, and homeowner’s insurance — on a median-priced residential property. RealtyTrac figures also assume that home buyers take a fixed 30-year mortgage at prevailing rates with a 20% down payment. In addition, the payments include insurance and property taxes at 1.4% of home price. These calculations use a 2014 estimate for median income.

RealtyTrac calculated the affordability rate each month from January 2000 to May 2014. We excluded counties where the recorded affordability ratio for May significantly diverged from proceeding months. RealtyTrac also provided historical averages, as well as annual peak and trough values for its affordability ratio at the county level. Figures on median household income are five-year estimates from the Census Bureau’s 2012 American Community Survey. GMP figures are from the Bureau of Economic Analysis and are 2012 estimates.

These are the 10 least affordable housing markets in America.

10. Los Angeles County, Calif.
> Affordability rate: 50.0%
> Historical avg. affordability: 50.4%
> Household median income: $56,241
> Population density: 2,437.0 per sq. mile

Los Angeles County homes are among the least affordable in the nation for its residents. A typical Los Angeles family needed to spend half its income to pay for a median-priced home, which included mortgage payments and property taxes. As unaffordable as Los Angeles homes currently are, however, they are actually in line with the area’s historical average for affordability since January 2000. While Los Angeles homes were more affordable during the housing downturn and subsequent recovery, they have become less affordable recently.

 

9. Taos County, N.M.
> Affordability rate: 51.0%
> Historical avg. affordability: 53.5%
> Household median income: $33,835
> Population density: 14.9 per sq. mile

Skiing, the arts and Native American culture are among the attractions that lure visitors to Taos County. Its status as a seasonal destination may be one reason homes in the area are often unaffordable. While Taos is home to many high-end properties, residents are hardly among the wealthiest Americans. Between 2008 and 2012, the median household income in Taos County was just under $34,000. To afford payments on a typical county home, households require more than half the median household income in the area. This is nothing new. Since 2000, the percentage of median income needed to afford a median-priced home in the area has averaged roughly 53%, among the highest rates in the country.

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8. Marin County, Calif.
> Affordability rate: 56.1%
> Historical avg. affordability: 59.4%
> Household median income: $90,962
> Population density: 490.2 per sq. mile

Marin County is connected to San Francisco via the Golden Gate Bridge. While some parts of the county are quite urban, with many residents commuting to San Francisco, other parts are quite rural. Marin is one of three counties among the 10 least affordable that is located in the San Francisco metro area. In 2013, the area’s economy was one of the fastest growing in the nation. San Francisco was also among the most productive cities in the nation, ranking seventh in economic output among all U.S. metro areas. As of May, residents needed to earn 56% of the area’s median household income to afford a mortgage on an area’s median-priced home. This is despite the fact that Marin is among the wealthiest counties in the United States, with a median household income of $90,962 between 2008 and 2012.

7. San Mateo County, Calif.
> Affordability rate: 57.4%
> Historical avg. affordability: 57.9%
> Household median income: $87,751
> Population density: 1,621.8 per sq. mile

San Mateo County lies just south of San Francisco and is home to a number of large companies, including Gilead Sciences, Oracle and Facebook. San Mateo has some of the most expensive home prices of any county in the nation. Although the area’s median household income was estimated at $87,751 — far better than most metro areas — high home prices and high rents make living in the area increasingly less affordable for middle-class Californians. As of 2013, the average home price in San Mateo County was more than $700,000, higher than all but three counties in the nation.

6. Pitkin County, Colo.
> Affordability rate: 64.6%
> Historical avg. affordability: 82.2%
> Household median income: $68,621
> Population density: 17.6 per sq. mile

Pitkin County’s proximity to many mountains makes the area an ideal spot for tourism. The county is mainly comprised of ski village communities like Aspen, Ashcroft, Snowmass and Redstone. Like other seasonal vacation spots reviewed, it is likely that home prices are pushed higher by seasonal residents who wish to own a home in these trendy and wealthy communities. In Pitkin County, more than 64% of median household incomes is required for mortgage payments on a median-priced home. Still, by this measure, Pitkin County is more than twice as affordable today as it was in 2007, when the affordability rate was 156.7%.

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5. Bronx County, N.Y.
> Affordability rate: 67.5%
> Historical avg. affordability: 73.0%
> Household median income: $34,300
> Population density: 33,067.1 per sq. mile

Bronx County is relatively poor. Those who live in the area had a median household income of $34,300 — nearly the lowest of the counties reviewed. The area’s unemployment rate was 10.6% in May 2014, and almost 30% of residents lived below the poverty line. Yet residents may choose to pay a premium to live in close proximity to the large economic centers located within metropolitan New York. The metro area had a gross metropolitan product of over $1.3 trillion, the highest of all metropolitan areas. Average home prices were also among some of the highest reviewed. Bronx County residents spent 67.5% of their median annual income on mortgage payments for a median-priced home.

4. New York County, N.Y.
> Affordability rate: 75.3%
> Historical avg. affordability: 79.2%
> Household median income: $68,370
> Population density: 70,172.6 per sq. mile

New York County, better known as New York City’s Manhattan, is among the most expensive places in the United States to live. Mortgage payments on a median-priced home required homeowners to earn more than 75% of the area’s median household income as of May — a figure that is actually down from a monthly average of more than 79% since 2000. Recently, New York has experienced a surge in development of extremely high-end properties — three residential skyscrapers are currently under construction on Manhattan’s 57th Street alone, a stretch now frequently referred to as “Billionaire’s Row.” Properties in these new developments are listed at prices in the tens of millions of dollars.

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3. Teton County, Wyo.
> Affordability rate: 75.4%
> Historical avg. affordability: 84.3%
> Household median income: $69,020
> Population density: 5.4 per sq. mile

Only 22,268 residents live in Teton County year-round; however, the population swells during the summer months. Grand Teton National Park, for instance, hosts between three and four million visitors each year. Additionally, Jackson Hole, a high-end vacation town located in the area, experiences large surges in its population during the tourist seasons — 52,000 in the summer and 5,000 in the winter. It is likely that the disproportionately large number of vacationers compared to year-round residents has increased home prices. Residents spent more than 75% of their median annual income on mortgage payments on median-priced homes. Yet, Teton County is more affordable than in previous years. Since January 2000, residents spent an average of 84.3% of median income on payments for median-priced homes. As of May, residents had to spend 75% of median income to afford such payments.

2. Kings County, N.Y.
> Affordability rate: 76.9%
> Historical avg. affordability: 77.7%
> Household median income: $45,215
> Population density: 35,763.9 per sq. mile

Kings County, which comprises the New York City borough of Brooklyn, is home to nearly 2.6 million Americans. It is also among the nation’s most expensive places to live. Since the start of 2000, it has cost nearly 78% of the borough’s median household income to afford mortgage payments on a median-priced property. Brooklyn property prices are at least partly influenced by those in Manhattan, yet residents in Brooklyn often have lower household incomes. Between 2008 and 2012, the median household income in Brooklyn was $45,215, well below the median of $68,370 for Manhattan.

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1. San Francisco County, Calif.
> Affordability rate: 78.1%
> Historical avg. affordability: 75.2%
> Household median income: $73,802
> Population density: 17,341.1 per sq. mile

Households in the city and county of San Francisco must earn at least 78% of the median household income in order to afford a median-priced property. One problem facing residents has been a dearth of affordable housing in the San Francisco area caused perhaps in part by zoning restrictions. Housing affordability is hardly a new problem for the city. Since 2000, residents have had to earn 75% of the median household income on average to afford mortgage payments on a median-priced home in the area. An interest rate hike would make home ownership even more expensive. A one percentage point increase in 30-year mortgage rates would mean it would take 85% of the area’s median income to afford mortgage payments.

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