DC area ranks in the top 50 of the world’s most unaffordable cities, report says

WASHINGTON – The D.C. area is tied with Charlotte, NC, on a ranking of the most and least affordable cities in the world. 

The annual Demographic International Housing Affordability report

The rankings were based on survey results from 94 major markets across eight countries (Australia, Canada, China, Ireland, New Zealand, Singapore, the U.K. and the U.S.) in the third quarter of 2023. The report measures housing affordability using a figure called “median multiple,” a price-to-income ratio that divides the median house price by the median household income. 

The markets are categorized based on their median multiple into five groups: “Affordable” (3.0 and under), “Moderately Unaffordable” (3.1 to 4.0), “Seriously Unaffordable” (4.1 to 5.0), “Severely Unaffordable” (5.1 to 8.9) and “Impossibly Unaffordable” (9.0 and over).

The Washington D.C. metro area, which includes parts of Maryland, Virginia and West Virginia, fell smack dab in the middle of the list, tying for 48th in affordability with Charlotte, along with Greater Manchester, Nottingham, Warrington & Cheshire in the United Kingdom. 

Nearby Baltimore ranked 26th on the list. 

Most affordable North American cities for housing, according to report

In the U.S., the report named the most affordable housing market as Pittsburgh, Pennsylvania. 

Here are the top 10, according to the report. 

1. Pittsburgh, Pennsylvania (3.1)
2. Rochester, New York (3.4)
3. St. Louis, Missouri (3.4)
4. Cleveland, Ohio (3.5)
5. Edmonton, Canada (3.6)
6. Buffalo, New York (3.6)
7. Detroit, Michigan (3.6)
8. Oklahoma City, Oklahoma (3.6)
9. Cincinnati, Ohio (3.7)
10. Louisville, Kentucky (3.7)

Top 10 ‘impossibly unaffordable’ cities, according to report

The least affordable market in the English-speaking world last year was Hong Kong, according to the report. 

In the U.S., there were five cities that made the list – mostly on the West Coast.

Here are the top 10 cities dubbed “impossibly unaffordable” worldwide:

1. Hong Kong (16.7)
2. Sydney, Australia (13.3)
3. Vancouver, Canada (12.3)
4. San Jose, California (11.9)
5. Los Angeles, California (10.9)
6. Honolulu, Hawaii (10.5)
7. Melbourne, Australia (9.8)
8. San Francisco, California (9.7)
9. Adelaide, Australia (9.7)
10. San Diego, California (9.5)
11. Toronto, Canada (9.3)

Why so unaffordable?

According to the report, an increase in remote work during the pandemic fueled a demand for housing – particularly in “suburban, exurban and even more remote areas.”

“The result was a demand shock that drove house prices up substantially, as households moved to obtain more space, within houses and in yards or gardens,” the report states.

It also blames the affordability issue on “urban containment policies,” which it says are designed to “limit sprawl and increase density” in such areas. 

“While well-intentioned, these policies severely constrict the land available for housing,” the report says. “In constrained markets, higher land values translate to dramatically higher house prices.”