Merced among nation’s most unaffordable small metro housing areas, says USA Today report

by Victor A. Patton l August 29, 2024

There’s a saying that two seemingly opposite things can be true at the same time. 

Case in point, the idea Merced is more affordable than other California cities, yet considerably less affordable than many U.S. cities of its size.

That’s one of the takeaways from USA Today Homefront’s 2024 Affordable Housing statistics report.

The report found that the top five most unaffordable small housing metro areas are all in California. Merced is ranked number five on that list, while Santa Maria placed first, followed by San Luis Obispo, Napa and Salinas. 

Some of the influencing factors include California having the No. 1 most expensive housing market in the nation. 

That’s combined with Merced County having a median household income of around $66,000, which is considerably lower than the state’s median household income of about $91,500, according to the U.S. Census.

Still, the epidemic of unaffordable housing isn’t just a Merced problem, it’s nationwide. 

According to the USA Today Homefront report, over three-quarters (77%) of U.S. households cannot afford a median-priced home in America, which is $495,750 in 2024.

“America’s affordable housing and homelessness crisis is caused by two primary drivers: the severe shortage of homes affordable to people with the lowest incomes, and the wide gap between incomes and housing costs,” Sarah Saadian, senior vice president of public policy and field organizing for the National Low Income Housing Coalition, said in the USA Today Homefront report. 

According to Zillow, the average median list price from a home in Merced is $427,667.

As if the report couldn’t be any more sobering, assuming only a 10% down payment and a 6.5% mortgage rate, over 75% of U.S. households can’t afford a median-priced new home listed at $495,750 in 2024, according to the National Association of Home Builders.

In addition, nearly half of U.S. households don’t make enough to afford even a $250,000 home. A $45,975 salary qualifies a household for a $150,000 mortgage, but only 40.5 million households can afford such terms.

If you are looking for the most affordable small housing market in the U.S., forget about the West Coast. 

The USA Today Homefront report ranked Bay City, Michigan, as the top most affordable housing market among small metro areas, followed by Elmira, New York.

Davenport, Iowa and the Illinois cities of Moline and Rock Island were tied for third. The Ohio cities of Dayton and Kettering were tied for fourth most affordable small metro areas, followed by Akron, Ohio in fifth place.