Housing market crisis: The average U.S. salary covers just 22.4% of a home cost
New research has identified the US cities with the best salary-to-house-price ratio, and it's good news for residents of Peoria, Illinois. The study compared the average salary of residents in nearly 200 US cities to the cost of a two or three-bedroom home to produce the ranking. Three Ohio cities and three Texas cities also make the top ten, making the two states the ‘most affordable.’
Peoria, Illinois, has been identified as the most affordable city in the US, with an average salary amounting to nearly 52% of the cost of a three-bedroom home.
This is according to a new study by property buying expert Eden Emerald Buyers Agent, who analyzed property and salary data for nearly 200 US cities with a high employment rate.
By comparing census data for the average annual salary in each city to Zillow data on the cost of a three-bedroom family home, a ranking was produced wherein each city was given a score out of 100 to reflect their affordability.
Peoria, Illinois, takes the top spot, as the average annual salary equates to 51.9% of the value of a three-bedroom home.
Across all the cities in the ranking, a typical yearly salary only amounts to 22.4% of the cost of a home, making Peoria 132% more affordable than the average US city.
In second place is Beaumont, Texas, with an average salary equating to 36.8% of the cost of a home. This makes Beaumont 64% more affordable than the average US city.
In third is Midland, Texas, which is 62% more affordable than the average city. An annual salary in Midland typically equals 36.3% of the value of a three-bedroom home.
Fourth place goes to a third Texas entry, Houston, with the average annual income equaling 35.9% of a standard three-bedroom property, 60% more affordable than the average US city.
In fifth is Pittsburgh, Pennsylvania, with an annual salary amounting to 35.6% of the cost of a family home. This makes Pittsburgh 59% more affordable than the average US city, where the typical salary equates to just 22.4% of the cost of a home.
Ohio’s first entry is in sixth place, as Cleveland’s average annual salary equals 35.2% of the cost of a three-bedroom property in the city, making it 57% more affordable than average.
Toledo, Ohio, is seventh. The average annual income of a Toledo resident is 34.7% of the cost of a family home – 55% more affordable than the US average.
In eighth place is Huntington, West Virginia, where houses are 53% more affordable than the average US city. The average salary in Huntington is 34.4% of the total cost of a three-bedroom home.
Davenport, Iowa, takes ninth place, with an average annual income amounting to 33.7% of the cost of a house, making the city 50% more affordable than the average US city, where a salary equals just 22.4% of the price of a three-bedroom home.
Rounding out the top ten cities is Lima, Ohio, where a resident’s annual income equates to 33.5% of the cost of their family home – just under 50% more affordable than the average city.
The ten most affordable US cities to buy a house
| Ranking | City | Average Annual Income as a Percentage of the Cost of a Three-Bedroom Home |
| 1 | Peoria, Illinois | 51.9% |
| 2 | Beaumont, Texas | 36.8% |
| 3 | Midland, Texas | 36.3% |
| 4 | Houston, Texas | 35.9% |
| 5 | Pittsburgh, Pennsylvania | 35.6% |
| 6 | Cleveland, Ohio | 35.2% |
| 7 | Toledo, Ohio | 34.7% |
| 8 | Huntington, West Virginia | 34.4% |
| 9 | Davenport, Iowa | 33.7% |
| 10 | Lima, Ohio | 33.5% |
On the other side of the scale, Salinas, California, is the city with the biggest disparity between average salary and housing cost, with a typical annual income equaling just 6.9% of the average price of a three-bedroom property.
This makes Salinas 69% less affordable than the average US city.
Commenting on the findings, Josh Roth, Chief Buyers Agent at Eden Emerald Buyers Agent, says,
"Peoria, Illinois, tops the ranking, with the salary-to-housing cost ratio significantly better than elsewhere in the US.
“At $81,504.12, the city’s average annual income isn’t exceptionally high by national standards; however, when compared to local housing costs, it is relatively strong.
“With a declining population, Peoria isn’t dealing with the housing shortages seen in other areas, meaning the market can afford to stay reasonable relative to income.
“Texas and Ohio cities dominate the top 10 most affordable cities. Both states benefit from relatively low housing costs, thanks to the abundance of land and relaxed zoning laws. This makes it easier and cheaper to build homes, keeping the housing supply strong.
“On the other hand, eight of the 10 least affordable cities are in California, reflecting the strict zoning laws, high housing demand, and limited land availability.
“Although California offers lots of job opportunities, many of the roles aren’t within high-paying sectors like tech and finance. Tourism, agriculture and retail contribute heavily to employment in the state, but don’t typically offer wages that can support the housing costs.”