Prices of homes likely to be bought by midlevel executives have climbed significantly this year. This increase has combined with the rise in interest rates to make such housing much less affordable in many parts of the country, according to a study by Ernst & Young.
"Last year, four-bedroom homes could be purchased in half of the 70 markets surveyed for 25% of local median income or less," Ernst & Young said. "This year, with higher interest rates and rising home prices, the number of such markets dropped to one-third."
The consulting company did a cost analysis that compared "what typical midlevel employees are required to shell out of take-home pay for 'amenitized housing' (a four-bedroom home or luxury rental apartment)." Some 70 cities nationwide were included.
The survey also found wide disparities across the country in the impact of this year's spike in interest rates.
"A 2 percentage-point spike in mortgage rates increased after-tax monthly payments... in San Francisco by $400 - but in Houston, it caused only a $100 increase."
In terms of "amenitized" housing cost relative to income, the study found Honolulu the most expensive city (56.5%), followed closely by San Francisco (50.7%).
The most affordable was Houston (18.5%), followed by Kansas City, Mo., and Oklahoma City, both at 19.6%.