Real Estate News

New report affirms 'existence of pockets of affordable housing'

Published: 10 Feb 2017

Rising rates can paint metropolitan areas as too expensive on the whole for interested buyers to even consider. According to Zillow, buyers may want to refrain from writing off entire markets as "unaffordable," since this might not tell the whole story, at least for 2015.

The source specifically looked at the regions with small "mortgage burdens" that sit next to markets flush with high demand. These areas included places on both coasts, as well as popular cities in between, like Houston and Denver.

In this context, mortgage burdens meant the percentage of a resident's income required to pay off the housing debt. On that scale, Palo Alto, Calif., was the highest, where mortgage burdens were 75.4 percent of income.

Compared to this, the city with the smallest burden was Detroit, which only accounted for 5.9 percent of income. On the whole, meeting an average monthly mortgage payment in the U.S. demanded 14.9 percent of the median income of a household.

In general, several cities in the U.S. are gaining reputations for high cost, even on an international scale. Business Intelligence recently compiled a list of the U.S. cities that placed in the Worldwide Cost of Living report from the Economist Intelligence Unit.

According to these figures, Miami was the 49th most expensive city in the world, and the most affordable American city to place on the report. The most expensive was New York City, which was the seventh most expensive, right above Los Angeles. These were also the only two U.S. cities to place in the report's top ten.

The Zillow report listed the cities with the smallest percentage of income for mortgages next to both of these high rankers: For New York and northern New Jersey, it was Brentwood, N.Y., and for the Los Angeles/Long Beach/Anaheim area, it was Lancaster, Calif.