Real estate technology company Ojo Labs has been tracking home affordability for some of the largest metros in the U.S., and while a familiar market tops the list for unaffordability, others may be a surprise.
The San Francisco Bay Area (San Francisco, Oakland and San Jose) was the least affordable metro in September, according to Ojo’s data, recording an unaffordability score of 9.94. Ojo’s unaffordability score is a ratio derived from comparing monthly median housing prices to the area’s median household income. The higher the score, the more unaffordable a metro is for a household making the area median income.
The fact that the Bay Area, with its notoriously high home prices — the median sales price in September was $1,250,000, according to Ojo Labs — leads the ranking is not shocking, nor is the fact that the four least affordable metros in the U.S. are in California. Following the Bay Area, however, is Monterey-Salinas in nearby Monterey County, with a median home price of $825,000 and a 9.76 unaffordability score. San Diego, meanwhile, saw its median home price reach $750,000 in September, pushing its unaffordability score to 8.16, good for the third-highest score in the country.
Los Angeles is fourth on the list, which some might consider surprisingly low considering the city’s similarly well-earned reputation for expensive housing. But the City of Angels actually saw a modest decline in its median home price last month, bumping it below San Diego for the time being with an unaffordability score of 8.11.
Of the 25 U.S. metros with the most homes sold in September, Milwaukee saw the largest increase in its unaffordability score, vaulting slightly more than 50% year over year to reach 3.59. And across all metro areas in which more than 10,000 homes were sold during the month, Phoenix saw unaffordability rise the most, jumping nearly 21% for a score of 5.39.
But the unaffordability scores for these two cities each pale in comparison to those seen in California’s most expensive markets. So too does the overall affordability score for the nation’s top metros. At 4.85, this score actually dropped slightly from August to September, a potential signal of a cooling market entering the fall, according to Ojo Labs.
As expensive as the market remains, Monterey-Salinas was one of two markets in Ojo’s September analysis that become more affordable year over year. Its unaffordability score fell by 2.1% compared to the same month in 2020. Baltimore posted the biggest decline in its unaffordability score. Its score of 3.76 was 6.76% lower than it was in September of last year.