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Where housing may become unaffordable by 2025

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When it comes to unaffordable housing, everyone knows that cities like San Francisco and New York are notoriously hard markets to become a homeowner in. However, as housing markets continue to heat up across the nation, more areas are becoming less affordable. Median home prices have seen record highs recently, and with so many other costs to account for like maintenance and insurance, the lack of affordable housing may delay the path to homeownership for some.

To help gather some insight into the changing housing markets, we’ve conducted a study projecting which U.S. cities may become unaffordable by 2025. Using Zillow’s typical home values, we forecasted their potential growth based on current year-over-year change projections. We then compared it to the projected median U.S. home value for 2025 ($481,692.98) to see what cities just miss the mark of affordability. Only cities that were not previously unaffordable were included in our list of top 10. Here’s what we found:

  • Out of 177 cities studied, Worcester, MA is projected to become the top city both overall and in the Northeast to become unaffordable, with an estimated typical home value of $523,017.38, which is 8% higher than the projected U.S. median value.
  • Bakersfield, CA is one of the top cities in the West that’s projected to become unaffordable by 2025. Typical home values are projected to rise to $520,933.24.
  • In the South, Orlando, FL is estimated to become unaffordable, with typical home values increasing to $517,913.99.
  • Out of the Midwest, a projected typical home value of $506,763.47 will knock Madison, WI out of the range of affordability.
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Cities with a lack of affordable housing by 2025

The current median home price is $363,300 and has set an all-time record high for the nation. With housing in limited supply and high demand, many residential real estate markets are on the fast track to becoming unaffordable. Based on our research, here are some of our top predictions for cities that may run out of affordable housing by 2025.

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1. Worcester, Massachusetts

As the top city overall and in the Northeast, Worcester, Massachusetts, ranked first on our list of cities that may become unaffordable by 2025. This New England city is a hub for the sciences, with strong pipelines to the medical and biotech industries. Despite its modern focuses, it’s still steeped in history. Its estimated typical home value of $523,017.38 is outpacing all other cities on this list, putting Worcester on the fast track to becoming unaffordable.

  • Top prediction for becoming unaffordable in the Northeast
  • Projected median home value by 2025: $523,017.38
  • Year-over-year percent growth: 12%
  • Percent difference from the projected U.S. median home value in 2025: 8.2%

2. Bakersfield, California

Although Bakersfield is currently considered a more affordable city by California standards, it’s well on its way to becoming more expensive over the next several years. Projected to grow at a rate of 13.4%, it has an estimated typical home value of $520,933.24. With growth like that, prospective homebuyers in Bakersfield should be aware that the housing market may just be as hot as the weather.

  • Top prediction for becoming unaffordable in the West
  • Projected median home value by 2025: $520,933.24
  • Year-over-year percent growth: 13.4%
  • Percent difference from the projected U.S. median home value in 2025: 7.8%
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3. Orlando, Florida

Orlando’s year-round sunshine may make it an ideal place to live, but its competitive housing market is likely to be unaffordable in the near future. With a predicted typical home value of $517,913.99 in 2025, the home to Disney World is making a jump toward unaffordability by being more than $10,000 above the typical values of the seven cities below it. With demand for housing showing no signs of stopping, it may be difficult to become a homeowner in Orlando.

  • Top prediction for becoming unaffordable in the South
  • Projected median home value by 2025: $517,913.99
  • Year-over-year percent growth: 14.6%
  • Percent difference from the projected U.S. median home value in 2025: 7.2%
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4. Melbourne, Florida

Another Florida city that’s becoming unaffordable is Melbourne. Located on the Space Coast (near the Kennedy Space Center), Melbourne is loved by ocean and art enthusiasts alike. However, its projected home value growth of 15.6% is not something to love, because it’s predicted to push this coastal Florida town out of the realm of affordability.

  • Projected median home value by 2025: $507,515.48
  • Year-over-year percent growth: 15.6%
  • Percent difference from the projected U.S. median home value in 2025: 5.2%

5. Merced, California

While nowhere near being as unaffordable as San Francisco or Los Angeles, the California city of Merced is still estimated to become less reasonably priced by 2025. Located in the San Joaquin Valley, its strong employment in agriculture, manufacturing and tourism are a big pull for people to move to the area. As it continues to grow, Merced is likely to join the ranks of many other California cities with unaffordable housing.

  • Projected median home value by 2025: $507,120.11
  • Year-over-year percent growth: 12%
  • Percent difference from the projected U.S. median home value in 2025: 5.1%

6. Madison, Wisconsin

As a Midwestern cultural hub for sports, food and state government, it’s no surprise that the top pick to become unaffordable in the Midwest is Madison, Wisconsin. Equal parts sports-obsessed college town and ideal place to retire, Madison is a city that anyone can settle down in. So although the Midwest is known for its lower cost of living, Madison may just be on the way to bucking the norm by 2025.

  • Top prediction for becoming unaffordable in the Midwest
  • Projected median home value by 2025: $506,763.47
  • Year-over-year percent growth: 11.4%
  • Percent difference from the projected U.S. median home value in 2025: 5.1%
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7. Idaho Falls, Idaho

Idaho Falls is a city situated on the Snake River, and its residents get to enjoy the many natural, cultural and astronomical attractions the city has to offer. With a population of 64,818 in the last census, Idaho Falls is currently a very affordable city to live in. However, with a growing housing market and job boom in tech, health and energy, this eastern Idahoan city is on track to becoming less affordable in the near future.

  • Projected median home value by 2025: $506,239.46
  • Year-over-year percent growth: 14.1%
  • Percent difference from the projected U.S. median home value in 2025: 5.0%


8. Port St. Lucie, Florida

Nestled on Florida’s Treasure Coast, this up-and-coming urban area benefits from a wealth of recreational and outdoor attractions. Port St. Lucie is home to a variety of nature preserves and has access to many recreational areas like beaches and golf courses. With a variety of outdoor activities to fit any lifestyle, it’s understandable that Port St. Lucie is predicted to lose its affordability by 2025.

  • Projected median home value by 2025: $504,500.85
  • Year-over-year percent growth: 15%
  • Percent difference from projected median U.S. home value by 2025: 4.6%

9. Tucson, Arizona

Surrounded by mountain ranges and two national parks, Tucson is a great place for adventurers to have their home base. As the home of the University of Arizona and a popular place to retire, many people flocking to this city may find that it’s becoming less affordable. With the high projected year-over-year growth rate of 16.9%, Tucson had to make our list of cities that may soon become unaffordable.

  • Projected median home value by 2025: $503,159.42
  • Year-over-year percent growth: 16.9%
  • Percent difference from projected median U.S. home value by 2025: 4.4%

10. Minneapolis, Minnesota

Known as one of the Twin Cities in Minnesota (the other being St. Paul), Minneapolis is on track to becoming unaffordable by 2025. The city is divided into two parts by the Mississippi River, and its access to green parks and beautiful lakes would make any outdoor lover happy to call Minneapolis home. With such prime real estate, a strong job market and rising home values, it’s no wonder this Minnesota city is on the brink of becoming unaffordable.

  • Projected median home value by 2025: $500,874.13
  • Year-over-year percent growth: 11.1%
  • Percent difference from projected median U.S. home value by 2025: 4.0%

Most unaffordable cities in the U.S.

Although the above cities are estimated to just miss the affordable housing mark by 2025, the following 10 cities are predicted to be the most unaffordable cities in America by that time. Throughout the list, we’ve highlighted which cities are the most unaffordable in major regions of the United States.

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1. San Francisco, California

  • Most unaffordable city in the West and overall
  • Projected median home value by 2025: $2.5 million
  • Year-over-year percent growth: 14.2%
  • Percent difference from the projected U.S. median home value in 2025: 135.7%

2. San Jose, California

  • Projected median home value by 2025: $2.3 million
  • Year-over-year percent growth: 16.6%
  • Percent difference from the projected U.S. median home value in 2025: 131.3%

3. Boulder, Colorado

  • Projected median home value by 2025: $1.6 million
  • Year-over-year percent growth: 15.8%
  • Percent difference from the projected U.S. median home value in 2025: 110.7%

4. Seattle, Washington

  • Projected median home value by 2025: $1.6 million
  • Year-over-year percent growth: 17.1%
  • Percent difference from the projected U.S. median home value in 2025: 108.4%

5. Los Angeles, California

  • Projected median home value by 2025: $1.5 million
  • Year-over-year percent growth: 15.1%
  • Percent difference from the projected U.S. median home value in 2025: 105.1%

6. San Diego, California

  • Projected median home value by 2025: $1.5 million
  • Year-over-year percent growth: 16.8%
  • Percent difference from the projected U.S. median home value in 2025: 104.8%

7. Austin, Texas

  • Most unaffordable city in the South
  • Projected median home value by 2025: $1.3 million
  • Year-over-year percent growth: 24.2%
  • Percent difference from the projected U.S. median home value in 2025: 94.2%

8. Salinas, California

  • Projected median home value by 2025: $1.1 million
  • Year-over-year percent growth: 15.2%
  • Percent difference from the projected U.S. median home value in 2025: 79.8%

9. Boston, Massachusetts

  • Most unaffordable city in the Northeast
  • Projected median home value by 2025: $1.1 million
  • Year-over-year percent growth: 12.8%
  • Percent difference from the projected U.S. median home value in 2025: 78.9%

10. Boise, Idaho

  • Projected median home value by 2025: $1 million
  • Year-over-year percent growth: 21.6%
  • Percent difference from the projected U.S. median home value in 2025: 76.9%

Why is housing unaffordable?

Real estate experts are saying that we’re currently in a housing affordability crisis, and the numbers don’t lie. Around 77 million U.S. households can’t afford a home that costs $325,000, and this means even more are priced out of the U.S. median, which comes in at $363,300.

When housing costs take up a significant portion of American incomes, it can make it difficult to pay for other living expenses or achieve larger financial goals like buying a car or starting a family. To offer some insight into this affordability crisis, we delve into some of the reasons why housing is so unaffordable.

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Lack of lower income housing

Not only is there a shortage of about 1 million homes in the current housing market, but there is a specific lack of housing for lower income households. Many low-income families are renters, and 24 million people are currently paying over 50% of their income to rent. These households are considered house poor, or when more than 30% of your income is paid to housing.

It’s important that both the federal government and developers work together to identify cost-effective housing solutions for low-income individuals. Tapping into modern technology like 3D-printed homes may be a viable option for low-income housing in the future.

Current incomes can’t compete with housing costs

Nowadays, the living wage for a family of four with two working adults and two children is a combined income of $68,808. In contrast, the U.S. median home price is more than five times that. Lower wages coupled with high housing costs and a lack of lower income homes only exacerbate the current affordability crisis.

Price increases in essential home building supplies

Over the course of the pandemic, essential softwood lumber supplies have skyrocketed in price. The National Association of Home Builders reports that the price of oriented strand board has risen by about 500% and plywood has risen by more than 200%. As a result, single-family home builders' costs increased by 153% and tacked on nearly $30,000 to the price tags of new homes.

 

The road to homeownership often takes careful planning and preparation. Whether you’re figuring out how much you can spend on housing or factoring in other costs like home insurance, every person has the right to an affordable home. Overall, we hope this study provides guiding insight into where housing may become unaffordable by 2025 so that you can plan your path to homeownership as best you can.

 

Methodology

Data from Zillow’s 2021 Home Values and Home Values Forecast were used to forecast typical home values of 178 major U.S. cities in 2025. They were compared to Zillow’s U.S. median home value whose growth was also projected for 2025. This projected U.S. median home value was compared to the forecasted typical home values of each city and used as the standard of affordability for this study.

The top 10 cities were included in the list, excluding any cities within 50 miles or less of one another and any city already labeled as unaffordable compared to the U.S. median home price in 2021. Additionally, the top 10 cities with the highest forecasted typical home values were included as the most unaffordable cities predicted for 2025.

We want to acknowledge that these calculations are simple projections based on home value data from one point in time. Home values vary based on a variety of factors and are not linear in growth, so each estimate may not be accurate to actual home values in 2025.

Sources: Zillow 1 2

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Taylor Covington
Taylor CovingtonContent Researcher

An in-house quantitative researcher for The Zebra, Taylor collects, organizes and analyzes data to shine a light on trends in the insurance industry and beyond. Taylor's data studies have been cited by The Atlantic, Bloomberg and Business Insider.

In her hometown of Austin, Texas, she can be found reading at Half Price Books or eating the world's greatest pizza at Via 313.