To assess the full cost of buying a new home, the Trulia analysis looked at the median household income in the 100 largest metro areas and measured how big a share of each monthly paycheck would be needed to buy a median-price home in that metro, based on listing prices. They ran the numbers based on a 30-year fixed-rate loan at 4 percent, and added in property taxes and insurance.
But then they added in the median household spending on electricity, gas and water for that metro (based on Census data), along with an estimate of commuting costs. When those expenses are accounted for, a lot of metros look a lot less affordable.
Most guidelines, including those set by the government, consider a house to be "affordable" if the cost of keeping up with mortgage, taxes and insurance amounts to roughly a third of your monthly income. By that measure, there are still plenty of "affordable" metro markets.
A median income home buyer in Detroit, Michigan, or Birmingham, Alabama, for example, can expect to spend less than 20 percent of their monthly income on direct housing costs on a median-price home. But when you factor in commuting and utility expenses, homeownership would eat up nearly 40 percent of the median paycheck. In relatively affordable Houston, direct housing costs are about 35 percent of income, but they jump to 50 percent with utilities and commuting included.
The analysis confirms that housing is most affordable in the middle of the country and least affordable on the coasts. But the gap between these markets is amplified when the full cost of home buying is accounted for.
In Akron, Ohio, for example, the median household income of less than $46,000 will easily pay for the median-priced home of $120,450. About 16 percent of your paycheck would go to direct housing costs, 8 percent for your commute and another 5 percent for utilities.
In San Francisco, on the other hand, a buyer with the median income of a little over $65,000 can expect to spend 77 percent of his or her monthly paycheck to buy the median-priced $1.2 million home. Add in utilities and commuting, and you'll burn through 85 percent of your monthly income.
"The least affordable housing markets in the country tend to be big cities, and they also tend to be in areas with a decent climate," said McLaughlin.