If you live in a city, you may have wondered just how expensive it really is to live in the place you call home.
One rule of thumb is to spend no more than 30% of your gross income on housing. However, hitting that ratio has become increasingly difficult for Americans as housing costs climb.
Must Read
- Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don’t have to deal with tenants or fix freezers. Here’s how
- Dave Ramsey warns nearly 50% of Americans are making 1 big Social Security mistake — here’s what it is and 3 simple steps to fix it ASAP
- ‘Rich Dad, Poor Dad’ author Robert Kiyosaki says this 1 asset will surge 400% in a year — and he begs investors not to miss its ‘explosion’
If you’re wondering where your city sits in when it comes to housing costs, an analysis of Census Bureau by SmartAsset breaks down the 50 biggest cities in the U.S. in terms of affordability. (1) Cities were ranked based on housing costs relative to median household income. Housing costs were determined by weighting median renter and homeowner costs according to the share of those who rent and own in each city.
Here’s a look at the top five most affordable and least affordable cities to live in.
What are the least and most affordable cities in the U.S.?
According to the analysis, the most affordable U.S. cities are:
El Paso, Texas
- Percent of income spent on housing: 20.35%
- Weighted monthly housing payment: $1,016
- Median household income: $59,932
Louisville, Kentucky
- Percent of income spent on housing: 20.38%
- Weighted monthly housing payment: $1,142
- Median household income: $67,251
Albuquerque, New Mexico
- Percent of income spent on housing: 20.54%
- Weighted monthly housing payment: $1,224
- Median household income: $71,494
Mesa, Arizona
- Percent of income spent on housing: 21.36%
- Weighted monthly housing payment: $1,523
- Median household income: $85,580
Indianapolis, Indiana
- Percent of income spent on housing: 21.82%
- Weighted monthly housing payment: $1,216
- Median household income: $66,900
On the other end of the spectrum, the top five most expensive cities are:
Miami, Florida
- Percent of income spent on housing: 36.02%
- Weighted monthly housing payment: $1,991
- Median household income: $66,337
Los Angeles, California
- Percent of income spent on housing: 32.64%
- Weighted monthly housing payment:: $2,237
- Median household income: $82,263
Long Beach, California
- Percent of income spent on housing: 28.72%
- Weighted monthly housing payment: $2,185
- Median household income: $91,318
New York, New York
- Percent of income spent on housing: 28.70%
- Weighted monthly housing payment: $1,942
- Median household income: $81,228
Oakland, California
- Percent of income spent on housing: 28.43%
- Weighted monthly housing payment: $2,422
- Median household income: $102,235
Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it
The high price of housing
A poll of over 4,000 homeowners and renters commissioned by Redfin found that 44% had struggled at some point to afford mortgage or rent payments. (2) Many of them even changed their living situations because of housing affordability. Of those people who struggled to afford housing, 6.4% moved in with their parents, 6.2% moved in with other family members and 2.8% moved in with their adult children. Others said they moved in with roommates to afford housing (5.7%).
But the numbers may not be surprising given the increases in housing costs in recent years.
The median sale price of a house sold in the U.S. in the second quarter of 2025 was $410,800, up nearly 30% from the $317,100 median five years prior, according to the Federal Reserve Bank of St. Louis.
It seems renters haven’t fared much better. According to a ConsumerAffairs report, citing data from Zillow, the national median rent has climbed more than 32% between 2020 and 2024. (3)
Budgeting when housing takes up a big share of earnings
If you calculate what percentage of your gross earnings go toward housing and realize that you are spending more than 30%, you may want to consider taking a look at your budget and finding ways to cut down on spending.
Whether you rent or own a home and you’re so stretched that you cannot cover housing costs, think about how you could make things more affordable. This may mean moving to a different neighbourhood, if you’re able, or taking on a roommate.
If there’s no way to lower housing costs, consider whether it is possible to cut down on other expenses, such as transportation. If you live in a city, would you be able to get by without a vehicle? Taking public transit instead of driving can eliminate auto loan, car insurance and gasoline costs.
When it comes to your budget, pick a model that works for your situation. For example, the traditional 50/30/20 rule dictates allocating 50% of your budget toward needs, 30% toward wants and 20% toward debt repayment and savings. You may have to adjust your wants amount if your housing costs push you over 50% in the needs category. It’s often recommended you maintain a certain savings level — including establishing an emergency fund — to set yourself up for future spending goals and protect yourself from falling into debt.
What to read next
- Ultra-rich Americans are ditching stocks and real estate, says this investing legend — 5 assets they’re using to shockproof their millions
- I’m 49 years old and have nothing saved for retirement — what should I do? Don’t panic. Here are 6 of the easiest ways you can catch up (and fast)
- There’s still a 35% chance of a recession hitting the American economy this year — protect your retirement savings with these 5 essential money moves ASAP
- This tiny hot Costco item has skyrocketed 74% in price in under 2 years — but now the retail giant is restricting purchase. Here’s how to buy the coveted asset in bulk
Join 200,000+ readers and get Moneywise’s best stories and exclusive interviews first — clear insights curated and delivered weekly. Subscribe now.
Article sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
SmartAsset (1); Redfin (2); ConsumerAffairs (3)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.