Mortgage payments unaffordable in half of largest markets

Homebuyers in Los Angeles on a median income would need to spend 46.8% on a mortgage payment for a typical home.

But the city isn’t the only one where mortgage payments are unaffordable; in fact, Zillow found that to be the case in more than half of the largest US metros.

While nationally 20% of a median income would be spent on mortgage payments, down from 21% between 1985 and 2000; those in New York, and Miami will need around 30%, with those in Portland and Denver not far behind.

However, California’s hottest markets including San Francisco and San Jose take around 40% of median income.

"Homes have gotten so expensive in many major cities that even with low mortgage rates, monthly costs for homes that are currently for sale are starting to be unaffordable," said Zillow Chief Economist Dr. Svenja Gudell.

"Down payments are a top concern for today's homebuyers, but the reality is that monthly costs are becoming unaffordable as well. Low inventory is pushing sticker prices higher, and when mortgage rates start to rise, monthly payments will be driven further into unaffordable territory," added Dr Gudell.

There are some areas where things are improving, including Cleveland where the median list price of about $144,000 would require 12.7% of the median income for monthly mortgage payments. Before the bubble it would have required 20%.