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San Jose World's Least Affordable City to Buy a Home

  //house-home.news-articles.net/content/2026/02/0 .. world-s-least-affordable-city-to-buy-a-home.html
  Published in House and Home on Sunday, February 8th 2026 at 19:12 GMT by KTVU
      Locale: UNITED STATES

SAN JOSE, Calif. - February 9th, 2026 - San Jose, California, has once again been identified as the least affordable city in the world to purchase a home, according to the latest analysis from Florida Atlantic University's (FAU) housing affordability index. The report, released this morning, paints a grim picture of the Bay Area's housing crisis, highlighting a widening gap between income and property values that experts warn is unsustainable.

The FAU study, which analyzes data from 95 cities worldwide, utilizes a 'price-to-income ratio' - a metric calculating the number of years of pre-tax income required to purchase a typical home. San Jose currently holds a staggering ratio of 19.2, meaning it would take nearly nineteen years of full income to save enough for a down payment and mortgage on an average home. This figure dwarfs the ratios of other notoriously expensive cities like Hong Kong (17.8) and London (16.4), solidifying San Jose's position at the bottom of global affordability rankings.

"The situation in San Jose isn't just a local problem; it's a symptom of a broader, systemic issue impacting the United States, and particularly the Bay Area," explained Dr. Elyria Rosenberg, lead author of the report and assistant professor of finance at FAU, in an interview with KTVU today. "While global economic factors contribute, the rapid escalation of housing prices, coupled with stagnant wage growth, is creating a truly inaccessible market for a growing segment of the population."

The report doesn't solely impact aspiring homeowners. The pervasive unaffordability is forcing long-term residents to relocate, contributing to outward migration, and impacting the overall economic vitality of the region. Lower and middle-income workers are disproportionately affected, facing increasing housing insecurity and longer commutes as they're forced to seek more affordable options further from employment centers. This strains infrastructure, increases traffic congestion, and impacts the quality of life for everyone.

Beyond the Ratio: A Deeper Dive into the Causes

Experts attribute the ongoing crisis to a confluence of factors. Limited housing supply, driven by restrictive zoning regulations and lengthy approval processes for new construction, remains a primary issue. The Bay Area has historically been slow to embrace higher-density housing solutions, prioritizing single-family homes and limiting the construction of apartments and condominiums.

The influx of high-paying tech jobs over the past two decades has further exacerbated the problem, creating a significant increase in demand without a corresponding increase in supply. While these jobs have undoubtedly contributed to the region's economic prosperity, they've also driven up housing costs to levels unattainable for many.

Furthermore, the rise of short-term rentals (like Airbnb) has reduced the available housing stock, contributing to increased competition and higher prices. Investment properties, often purchased by out-of-state or international buyers, also contribute to the upward pressure on prices, as these properties are often left vacant or rented at premium rates.

What's Being Done, and What More Needs to Be Done?

Local and state governments have implemented various initiatives to address the housing crisis, including streamlining the permitting process for new construction, incentivizing the development of affordable housing, and implementing rent control measures. However, these efforts have largely been insufficient to counteract the underlying forces driving up prices.

Experts argue that a more comprehensive and aggressive approach is needed, including:

• Zoning Reform: Eliminating restrictive zoning regulations that limit density and encourage the construction of a wider range of housing types.
• Increased Housing Supply: Significantly increasing the supply of affordable housing through public investment and incentives for private developers.
• Regulation of Short-Term Rentals: Implementing stricter regulations on short-term rentals to free up housing stock for long-term residents.
• Wage Growth: Focusing on policies that promote wage growth and ensure that incomes keep pace with rising living costs.

Dr. Rosenberg emphasizes that access to homeownership is more than just an economic issue; it's a cornerstone of the American dream. "When the dream of owning a home is out of reach for so many, it creates social and economic instability," she warns. "We need to prioritize solutions that ensure everyone has access to safe, affordable housing, not just those at the very top."

The FAU report serves as a stark reminder of the severity of the housing crisis in San Jose and the urgent need for bold action to address this growing problem. Without significant intervention, the city risks becoming increasingly unaffordable and inaccessible, potentially driving away talent and hindering its long-term economic prospects.