U.S. housing markets are the most affordable in the world, at least according to a recent study of more than 300 metro housing markets in nine countries conducted by the research group Demographia.
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U.S. housing markets were found to be more affordable than Canada, the United Kingdom, Ireland, Australia, New Zealand, Singapore, Japan, and China.
Researchers measured affordability by taking a look at median home prices and median household incomes. A market was rated “unaffordable” if it had a calculated value of higher than 3.0 and was “severely unaffordable” if above 5.1.
The U.S. markets analyzed showed a lot of variation — such as Detroit at the bottom with a 2.1 value while San Francisco had a 9.2 value. Still, the U.S. averaged 3.4 as a whole, making it more affordable than other countries.
Hong Kong, on the other hand, was the priciest and at a record high on the survey. The survey found that even if a household could direct all of its household income toward buying a home, it would still take 17 years before the household could afford to buy. To live on Hong Kong Island alone, a resident would pay about $900 in U.S. currency for just a 150-square-foot apartment. Hong Kong is the most densely populated places across the globe; it holds 6,845 people per square kilometer. New York, as comparison, hold 2,050.
Hong Kong also had the smallest homes in the study, with the average size of a new home at just 484 square feet.
The study found the following major markets were the most unaffordable:
- Hong Kong
- San Francisco
- San Jose
Source: “Think Housing Is Pricey in America? Be Glad You’re Not in Hong Kong,” realtor.com® (June 26, 2015)