5 most overvalued housing markets in 2025 including one where the cost is greater than average income
Something’s gotta give.Too many Americans are paying far too much of their income to keep a roof over their heads, new data shows — with experts warning that things can’t go on like this forever.In a survey of the country’s most overvalued housing markets, US News & World Report found a number of major cities where mortgage payers in late 2024 could expect to be squeezed to the too damn high tune of 60% or more of their annual per capita income for the privilege.
And even the less-absurd national median payment ratios are still way up there, pros warn, calling housing nationwide “increasingly unaffordable to the average buyers,” suggesting that “if mortgage rates don’t decline, some home asking prices will eventually have to adjust.”In 2020, the crunched numbers revealed, the average US homeowner paid about 25% of the per capita income for their mortgage, plus interest.As of November, that number has jumped to 36%.
And don’t get too excited about things being less expensive than they were last year, with things cooling down in recent hotspots like Florida, the insiders urge — that number is still too much.“While the good news is that income gains, increasing supply and mortgage rates have led to lower income-to-housing costs nationally versus the last quarter of 2023, they’re still significantly higher than in early 2000,” they say.Translation: Never mind inflation.
Even adjusted for that change, far more of our income is going to keeping lenders off our backs than just a decade and a half ago.To compile the list of worst offenders, the authors said they considered anything above the current national average of 36.3% to be “overvalued.” The information came primarily, they said, from the U.S.News Housing Market Index, “an interactive platform providing a data-driven overview of the housing market nationwide.”Here, a look at the five craziest markets right now — and no, believe it or not, New York isn’t one of them...