Housing is probably the biggest item in your budget, usually 30% of monthly expenses. And depending where you live, that percentage could be even higher. In most areas of the U.S., low inventory and high demand are driving prices ever higher.
These 10 cities are where you’ll pay the most.
Miami is a flashy city with warm weather, which draws people from all over the world. That also may be one reason for its high rental and housing costs. In fact, Miami had a median rent of $2,929 for a 0-2 bedroom apartment in February, according to Realtor.com. The report noted that the high price is partially due to an increase in luxury apartments on the market, but high-end rentals may be hard for an average person to afford.
Buyers won’t find many bargains either, as the median sale price for a home in March 2022 was $467,000.
Another area with beautiful weather and beaches is Los Angeles, a city of almost 4 million people. But with a median rental price of almost $4,000 for a 0-2 bedroom home in February, according to Realtor.com, the area is becoming more difficult for an average worker to afford rent.
And it’s not just rent. One of the most shocking home sales in March was for “The One” in Bel Air. The 105,000-square-foot home sold at auction for $141 million, making it the most expensive home sold at auction in the U.S.
Like Los Angeles, San Diego is warm and sunny, but it may not be so inviting for potential homeowners or renters. The California Association of Realtors found that the median price for a home sold in San Diego was $888,000 in February. That represented a 16.1% increase in the median price compared with a year earlier.
If that price will keep you a renter, know that the median rent for a two-bedroom apartment in March 2022 was $2,467.
Northern California is home to the legendary Silicon Valley, known for high-paying jobs in the tech industry — and high housing costs as well. The median price of all apartments with 0-2 bedrooms was $3,024, which was an increase of 14.2% from a year earlier. The biggest jump was specifically for two-bedroom apartments, which saw a 14.8% year-over-year increase compared to February 2021. The median price for an apartment that size was $3,441 per month, according to Realtor.com.
The median sold price for a three-bedroom home in March 2022 was $1.25 million.
Oakland is another city in the Bay Area that continues to see growth in the housing market. The typical value for a home is more than $1 million, according to the Zillow Home Value Index. That represents a 15.2% year-over-year increase in home costs.
Pro tip: You also may want to pack your wallet if you’re planning a visit to the Oakland A’s ballpark the next time you’re in town. In a recent survey of baseball fans and their spending, A’s fans said they would shell out more on average at a game than at any other Major League Baseball fans with a whopping $133.86 spent per game.
The nation’s capital also is a leader when it comes to spending money on housing costs. Economic development in the D.C. metro area in recent years has made land more expensive, which is causing housing prices to head up. The median rent in the D.C. metro area was $2,078 for 0-2 bedroom apartments in February. Costs for new homes are also expected to go up as an increase in building costs pushes new-home sale prices higher.
Boston’s high housing costs stem from a lack of inventory on the market, making it harder to find anything affordable as prices go up. The city also has seen an increase in jobs, but not an increase in housing availability to keep up with the new residents. The average rent for a one-bedroom apartment in Boston is around $2,525, which is a 20% increase compared to a year ago, according to real estate website Zumper.
Hawaii may be an inviting paradise, but housing costs may scare you away. The islands don’t have much room to build new houses on the little land that is available, which hurts the potential for new development and squeezes out any buyers or renters looking for affordable housing. The average rent in Honolulu is $1,847, according to RentCafe, with an average apartment size of less than 600 square feet.
One of the most expensive cities to buy a home in California is San Francisco. If you want to buy a home in the area, expect to pay more than $1 million for a place. The median cost of a home was $1.9 million in February, according to the California Association of Realtors. Think renting might be cheaper? Expect to pay around $2,970 for apartments with 0-2 bedrooms.
And it’s not just home prices that are expensive. In March, San Francisco was the first city in the country to reach the $5 mark for average gas prices per gallon, according to GasBuddy. So you may want to avoid working as a ridesharing driver in San Francisco if you’re trying to find a good side hustle to make extra cash in the city.
New York City
New York City has a reputation for being one of the most expensive cities to live in in the world, and that includes rent. The average cost of rent in Manhattan is a whopping $4,265 in Manhattan, according to RentCafe. New York City borough Brooklyn came in at an average $3,124 for rent per month. The city’s size may contribute to higher rates of housing. More than eight million people call one of New York’s five boroughs “home” so high demand for a place to live in a limited amount of space is a driving force behind high prices.
Still interested in buying a new home in one of these high-cost areas? Check with some of the best mortgage lenders to see what you can afford in an expensive city. And think about other ways to afford a high rent. You may want to consider a roommate or find a job that will allow you to telecommute to save some money. When home prices are expensive, buyers should think about alternative ways to save money.
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