1998 Study of Housing Costs
According to the E &Y Kenneth Leventhal Eighth Annual Housing Costs Study, Oklahoma City remained the city where housing took the smallest bite from employee paychecks in 1998. New York City took the biggest bite. E &Y Kenneth Leventhal is the real estate group of Ernst & Young LLP. Housing costs are based on the average cost of amenitized for-sale and rental housing for mid-level executives. American companies use the study as an evaluation tool in making relocation and expansion decisions.
Oklahoma City, the most affordable market, required only 21.3% of median family income to rent a luxury apartment and 13.6% of income to afford a four-bedroom, single-family home. In contrast, the average buyer pays 41.8% of median family income to rent a similar apartment and 45.3% of income to buy a four-bedroom residence in the New York City metro area.
The ten most affordable housing markets in order of rank are: Oklahoma City, Richmond, Kansas City, Knoxville, Raleigh-Durham, Indianapolis, Tulsa, Houston, Charlotte, and Dallas-Fort Worth.
The ten least affordable housing markets in order of rank are: New York City, San Francisco, Los Angeles, Boston, Oakland-East Bay, Pittsburgh, El Paso, Miami, San Jose, and Honolulu.
The study made several other observations:
High Cost Markets “Settle for Less”: The study does not imply that most professional households in New York spend more than two-fifths of their income on housing. Rather, it indicates that many households in high-cost housing regions must “settle” for less housing—either by buying smaller homes or by staying in rental housing.
Regional Variations Persist: Homeowners in coastal California and those in northeastern markets still pay roughly twice as much of their income to acquire housing as those in many urban areas in the Central and Southeast United States.
Southeast Offers Most Affordable Housing: The region extending from Texas north to Missouri has five of the ten most affordable large housing markets in the country.
Affordable “Pockets” Within the Costly Coasts: Not all of California and the Northeast are inordinately costly. In both Sacramento and Riverside–San Bernardino, housing requires less than 24% of the median local family income. Orange County required 25%.
Better value may also soon surface in Hawaii, where home ownership hasn't been very accessible in recent years. The value of a Honolulu mid-management home has dropped by $100,000 in two years.
In the Northeast, Newark–North New Jersey continues to offer low housing prices, requiring 29% of median local family income compared to the 43% cost across the Hudson in New York City.
Boston's housing affordability continues to worsen, primarily due to rising rents during the past year.