Key takeaways
- San Francisco, Anaheim, and Los Angeles are the most costly cities within the U.S., the place median earners must spend over 60% of their revenue on housing.
- The vast majority of the most costly locations to reside are situated on the coasts—led by California, which accounts for seven of the highest ten priciest cities.
- Home costs skyrocketed in the course of the pandemic and have solely not too long ago began to degree out, straining budgets and placing a lid on demand in lots of locations.
Shopping for a home right now is a pipe dream for a lot of Individuals. Month-to-month housing funds have hovered close to file highs for years as mortgage charges and home costs stay elevated. The everyday homebuyer right now spends almost 40% of their revenue on housing, in line with Redfin information—effectively above the really helpful threshold. To adapt, many individuals are as a substitute selecting to lease long-term or leaning on household for assist with down funds.
Practically the entire nation’s most costly main housing markets are concentrated alongside the coasts, the place restricted house and tight provide have lengthy pushed costs upward. Previous to the pandemic, although, prices had been extra manageable. It wasn’t till after the pandemic housing growth that it turned largely unaffordable to purchase a house, contributing to a chronic slowdown that has solely not too long ago began to get better.
So, which cities are the most costly? Why is housing so costly? Let’s uncover the most costly cities to reside in and purchase a home in 2026, the place locals must spend over 35% of their revenue on housing.
The ten most costly cities within the U.S.
A majority of individuals right now spend greater than 30% of their month-to-month revenue on housing, and in some locations, they spend almost half. The most costly housing markets within the nation are usually restricted to the very best earners. Median-income homebuyers are successfully priced out—a serious purpose for the years of sluggish demand.
| Metropolis | Share of revenue required to afford a typical house | Median family revenue | Median sale value |
| San Francisco, CA | 75.0% | $162,118 | $1,725,000 |
| Anaheim, CA | 69.4% | $126,178 | $1,249,500 |
| Los Angeles, CA | 68.0% | $97,775 | $930,000 |
| San Jose, CA | 66.2% | $176,401 | $1,650,000 |
| New York, NY | 61.6% | $98,287 | $790,000 |
| San Diego, CA | 57.7% | $115,304 | $930,000 |
| Miami, FL | 54.6% | $77,854 | $575,000 |
| Oxnard, CA | 53.6% | $119,133 | $892,000 |
| Oakland, CA | 49.6% | $139,407 | $945,000 |
| Bridgeport, CT | 47.0% | $127,489 | $690,000 |
There are 26 cities that we analyzed the place housing funds require between 30-35% of a typical revenue—technically unaffordable, however not sufficient to fulfill our threshold. Examples embrace Columbus (30.1%), Washington, D.C. (31.9%), Phoenix (32.9%), and Nashville (34.1%).
Cities the place affordability is declining probably the most
“Housing markets throughout the nation are present process an extended, sluggish reset from the pandemic, when costs had been climbing by 10% each month,” stated Daryl Fairweather, Redfin Chief Economist. “Homebuyers in 2020-2022 had been hungry to reap the benefits of low-rate mortgages, and residential sellers had been recurrently getting affords for hundreds over asking, resulting in a record-fast market. That development reversed as costs and charges skyrocketed in late 2022, however now the market is balancing out, which Redfin expects to proceed for the foreseeable future.”
Right now, affordability is bettering in all however probably the most aggressive markets, as home costs rise extra slowly than incomes. One notable point out is San Francisco: Despite the fact that it not too long ago turned the most costly housing market in America, demand has continued to climb on account of an inflow of AI wealth.
Coastal metros are the least reasonably priced locations to purchase a home
The East and West Coast are house to a majority of the most costly housing markets within the U.S. These areas have lengthy been the most costly locations as a result of provide has not stored up with demand over time. Homebuilders haven’t been as lively in coastal hubs on account of strict zoning legal guidelines and costlier land, making it much less interesting to construct housing and contributing to a scarcity. Wealth focus has additionally performed a job.
Not too long ago, although, a number of the most costly cities have seen outsized affordability features. San Jose (-6.7 ppts) is main the best way, adopted by Chicago (-6.1 ppts), Miami (-4.7 ppts), and Seattle (-4.6 ppts). Affordability is bettering primarily as a result of extra sellers are itemizing their properties than consumers are shopping for, boosting stock. Homeownership remains to be out of attain for most individuals, however the fee hole is starting to slim.
Why is housing so costly?
There are three main elements behind right now’s excessive home costs:
- Restricted housing provide
- Strict zoning legal guidelines
- Investor market share
Whereas zoning legal guidelines and investor market share play a job in right now’s home costs, the most important driver is a power stock scarcity. There aren’t sufficient properties for individuals who need them, and never sufficient homebuilding to fulfill demand.
This sample started in the course of the Nice Recession and was exacerbated in the course of the pandemic homebuying frenzy, when homebuyers capitalized on ultra-low mortgage charges. Now, demand has dropped as priced-out consumers wait on the sidelines, placing a lid on value progress and serving to affordability slowly enhance. However it would take years earlier than prices return to “regular.”
>> Learn: Why Are Homes So Costly?
Methodology
Rankings broaden on a Could 2026 Redfin evaluation of housing affordability by analyzing 96 of the most important U.S. metros (“cities”). The evaluation centered on the share of revenue a median-income resident must spend each month to afford a typical house. A house was thought of “unaffordable” if its corresponding month-to-month fee was greater than 35% of median month-to-month earnings, assuming a 20% down fee, typical taxes and charges, and a 30-year mortgage. Cities with the very best month-to-month revenue necessities ranked because the least reasonably priced.
All information got here from a Redfin evaluation of MLS, U.S. Census, and Atlanta Fed information.
