Access a hi-res version of this chart here.
The preliminary results of this study were published September 25, 2018. It has since been updated for clarity and better visual context.
Absent context, the cost of housing doesn't tell you very much about affordability. Half-a-mil for a 3-bedroom condo in Manhattan is unheard of, whereas half that for a home in Karachi is five times the going rate. For our second 2018 Global Basic Needs Comparison series, we evaluate global housing costs by providing context that matters. For each city evaluated, we include median cost of housing for a typical family (bar), as well as the ratio of median house price to median after-tax income (line).
Here are a few insight we wanted to call out:
- The typical $850k house in San Jose might be beyond reach in most U.S. cities, but in Silicon Valley it's only 5-6 times the median household income for that locality.
- Many cities in Eastern Europe hold the distinction of expensive in both concrete and relative terms. For example, a typical home in Moscow runs $350k (more than most U.S. cities), and it would take almost 20 years for a typical household to purchase if all household income went toward the home.
- Outside of the coast, most U.S. metros are relatively affordable, compared to the rest of the world. The typical ratio of home price to after-tax salary is less than 4.
- Detroit has the distinction of being both one of the cheapest cities to buy a home in real dollar terms, as well as the very cheapest city in relative terms. The median motor-city household makes enough to purchase the median home outright with two-years' worth of income.
While you're here, take a look at our three-stage mortgage calculator!