Boston Is the Seventh Most Unaffordable Real Estate Market in North America
We're ranked "severely unaffordable."
Out of the 50 most populous cities on this continent, Boston clocks in at the seventh most expensive.
That’s according to a new report from real estate search portal Point2 Homes, which looked at affordability ratios across North America. Affordability ratios, also referred to as median multiples, are calculated by dividing a city’s median home sale price by its median annual family income. So, the higher the ratio, the more time it takes to pay off a house—and the larger the affordability gap in that real estate market.
Point2 Homes divided Boston’s median home sale price, $610,000, by its median annual family income, $61,176, to arrive at an affordability ratio of 10. That’s “severely unaffordable” according to the International Housing Affordability Survey. “Severely unaffordable” is a category reserved for affordability ratios 5.1 and over.
At least we’re not Vancouver, which ranked as the most expensive city in North America with a ratio of 17.3. Vancouver outpaced both Manhattan and San Francisco—the United States’ most expensive markets—by two points. The report notes that although homes in Manhattan and San Francisco tend to be pricier than those in Vancouver, it’s Vancouver’s lower median income that inflates its affordability index. Meanwhile, Acapulco ranked as Mexico’s most expensive city, as well as the 15th most expensive market on the continent.
Point2 Homes’ findings also establish Canada, not the U.S., as North America’s most expensive real estate market when broken down by country. It has an overall median multiple of 7.5, while the U.S. rounds to 4.6. Good news, we suppose? You can see the complete study here.