The least affordable metro areas for America's middle class—5 of them are in California
California remains one of the most expensive states to live in, according to a recent Creditnews Research study that found America's middle class is being priced out.
In the report that asked, "Can America's Middle Class Still Afford Homeownership in 2024?", the independent research house studied the relationship between income distribution and housing costs across America's 100 most populous metropolitan areas to find the most and least affordable places for the middle class.
The report used income tiers based on Pew Research's household income percentile ranges for economic classes:
- Lower-middle class: $30,001-$58,020
- Middle class: $58,021-$94,000
- Upper-middle class: $94,001-$153,000
Creditnews Research found that in 2024, the middle class can afford an average home in just 52 of the top 100 metro areas in the United States. The least affordable metro areas were almost entirely on the Pacific coast.
Five of the 10 least affordable metro areas are in California. Highly desirable coastal cities like San Francisco and San Diego are not even an option for buyers at the top of the upper-middle class income range.
The least affordable metro area for America's middle class: San Jose-Sunnyvale-Santa Clara
The San Jose-Sunnyvale-Santa Clara metro area in California is the least affordable for all middle-class income ranges in the U.S., according to the report.
To afford a house in the San Jose area, you will need to make $468,252 — the highest of all 221 U.S. metro markets surveyed in an April National Association of Realtors report.
In addition, the average San Jose home value is $1,461,923, up 10.1% over the past year, according to Zillow.
In its report, Creditnews Research warns that the San Jose-Sunnyvale-Santa Clara metro area runs the risk of becoming a "donut city" as rising costs lead to a "wave of out-migration where residents and businesses relocate to the suburbs."
The San Jose-Sunnyvale-Santa Clara metro area is most notable for its connection to Silicon Valley, home to tech giants like Zoom, PayPal, Nvidia and Apple.
San Jose is also one of the most expensive large cities in the U.S. based on monthly costs, according to a 2023 doxo report. Residents of the California city pay an average of $3,504 in monthly expenses, or 71.2% higher than the national average.
The least affordable metro areas for America's middle class
- San Jose-Sunnyvale-Santa Clara, CA
- San Francisco-Oakland-Berkeley, CA
- Los Angeles-Long Beach-Anaheim, CA
- San Diego-Chula Vista-Carlsbad, CA
- Honolulu, HI
- Oxnard-Thousand Oaks-Ventura, CA
- Seattle-Tacoma-Bellevue, WA
- Boston-Cambridge-Newton, MA-NH
- New York-Newark-Jersey City, NY-NJ-PA
- Bridgeport-Stamford-Norwalk, CT
Number two on the list of the least-affordable metro areas for America's middle class is just an hour north of San Jose — the San Francisco-Oakland-Berkeley area.
For a single person to live comfortably in the San Francisco metro area, they need an average salary of $119,558, according to a SmartAsset study released in March.
And to afford a typical single-detached home, you'll need to earn $334,676, according to the National Association of Realtors report.
The average home value is $1,176,322, which is up 2.8% over the past year, Zillow states.
Because of San Francisco-Oakland-Berkeley's reputation as a tech region, it is unlikely the area will become affordable for middle-class Americans anytime soon, Creditnews Research notes in their report.
The northern California metro area is home base for tech companies like Meta, Salesforce, and Google.
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