According to an analysis recently released by our sister website Point2 Homes, Vancouver is the most unaffordable market in North America, even more so than Manhattan.
The study measured affordability in the 50 most populous cities in Canada, the United States and Mexico by dividing the median home sale price by the yearly median household income. The resulting affordability index, also known as the median multiple, shows how fast you could pay off your home in each location, if, hypothetically, you could spend your entire income on your mortgage.
In the U.S., New York City and two of its boroughs (which were considered individual markets because of their distinct characteristics) share the top 5 spots along with San Francisco and Los Angeles.
Owning a Home in Manhattan Is More Affordable Than in Vancouver
Notoriously pricey Manhattan is now more affordable than Vancouver. With a median multiple of 17.3, the Canadian city ranks as the most unaffordable market in North America. By comparison, Manhattan is the second most unaffordable market with a median multiple of 15.6.
Although the median home sale price in Vancouver ($1,108,345) is lower than that in Manhattan ($1,207,500), a lower median income ($63,944) is what makes the Canadian metropolis North America’s most unaffordable market.
Manhattan Sets the Unaffordability Bar in the U.S.
With a median home sale price of $1,207,500 and a median income of $77,559, Manhattan ranks as the most unaffordable housing market in the United States. Its median multiple currently stands at 15.6, which according to The International Housing Affordability Survey qualifies it as severely unaffordable.
The second most unaffordable market in the U.S., San Francisco has a median multiple of 13.8. The median home sale price in San Francisco, $1,275,000, is similar to that of Manhattan. But given the fact that San Francisco residents boast the highest median income in the country ($92,094), it would take you less time to pay off your home in this West Coast powerhouse than it would in Manhattan.
Brooklyn also secures its position among the top 5 most unaffordable U.S. markets. While the median income in Brooklyn doesn’t stray too much from the national median ($56,516), a typical Brooklyn home sells for $725,000, almost three times as much as the national median home price ($258,300), resulting in a severely unaffordable median multiple of 13.1.
Affordability is a growing problem in North America’s most competitive markets, where house prices have risen way above what people could afford on a median income. Hover over the chart below to find out where the other North American housing markets stand in terms of affordability:
To find out more about the 50 housing markets, take a look at the original article on Point2 Homes.