Home prices are out of control in markets such as San Francisco and Manhattan, which have the lowest levels of affordability in the U.S., however other cities in North America are still less affordable.
A new study, The International Housing Affordability Survey conducted by Point2Homes, shows the least affordable market in North America is located in Canada. The least affordable market in North America is Vancouver, Canada, where the median home sales price is more than $1.1 million and the median family income is only $63,944.
Vancouver’s affordability crisis was fueled by foreign investments in the real estate sector, according to an article by Minh Uong for The New York Times. Now, Vancouver has risen to one of the least affordable housing markets in the world.
The second least affordable market in North America is Manhattan, homes are even more expensive than Vancouver at $1.2 million, however the median income is higher at $77,559.
San Francisco came in as the third least affordable market in North America, and the second least affordable in the U.S. It’s median home price is the highest in North America at nearly $1.3 million, but is also holds the highest median income in the U.S. at $92,094.
The chart below shows how many years it would take to pay off a median priced home if borrowers paid 100% of the area’s median income toward the mortgage for major North American cities.
On the opposite end of the spectrum, Detroit came in as the most affordable city as median income borrowers could pay off their median priced home in just 1.8 years if they dedicated all their income toward their home.
As a whole, Canada came in as the least affordable country in North America with its median income of $64,752 and median home price of $485,680. Under this income and home price, a borrower could pay off their home in 7.5 years if they dedicated all their income to their home.
The U.S. held the middle position with a median home price of $258,300 and a median income of $56,516. Residents can pay off their mortgage in much less time at 4.6 years if they dedicate all their income toward their home.
Mexico’s median home price and median family income plummet drastically from those of the U.S. and Canada, however it also holds the most affordable housing. A median priced home in Mexico costs just $41,748, however the median family only earns $12,806 per year. The median income earner in Mexico could pay off their home in 3.3 years if they dedicated all their income to their median priced home.
For more info on the top housing markets in each country, click here.