New York and San Francisco are cities known for their abundant job markets and large metropolitan populations. Add to this list of designations the country’s two most challenging housing markets. In the current economic climate, additional financial pressure on housing pushes some working Americans out of the cities, regardless of their employment status.
A recent study by real estate site PortlandRealEstate.com, analyzes data from the National Association of Realtors, the US Census Bureau, and the Bureau of Labor Statistics to assess the ratio of new job openings per building permit to gauge the housing shortages in metropolitan areas.
Beyond Building Permits
The research team at PortlandRealEstate.com established the rankings based on a ratio of job growth-to-building permits to illustrate the imbalance between the number of individuals the area is looking to recruit for employment versus homes available for them to occupy. The study focuses on the number of new jobs to one building permit issued.
Job markets in some areas of the country may be bouncing back from the layoffs of recent years, but that doesn’t necessarily translate to affordability in other regions. With continued housing inventory issues across the country, landing a better job may not be the ticket into the housing market.
Where are the US hotspots for limited housing inventory? Likely different from where you’d expect.
Top 10 Cities with Highest Job Growth-to-Building Permit Ratios
New York City, New York, claims the top slot as the city with the highest ratio, at 31.4 jobs created for every building permit. Despite an abundant job market, this denotes a severe housing shortage in the city. A surge in new job offers increases demand for rentals, pushing housing prices up and making it more and more difficult for residents to secure affordable housing.
In second is San Francisco, California, with a ratio of 29.2, another example of a growing job market outpacing residential building in the city.
Springfield, Massachusetts, secures a third-place ranking with a ratio of 26.6 new jobs per one building permit, reflecting similar concerns to its first and second-ranking counterparts.
In fourth place, Urban Honolulu in Hawaii scores a ratio of 25.1, and Syracuse, New York, comes in fifth with a ratio of 21.8.
The other US metropolitan areas featured in the top ten list include Boston, with a score of 20.4; Miami, scoring 20.2, Chicago, at 19.5; New Haven, with 19.3 and Los Angeles, with a ratio of 18.3.
These high-ranking cities compare to an average among all cities assess of 7.64 jobs per building permit.
Among the top ten ranking cities, three states feature more than once: two cities from Massachusetts, two in New York, and two in California. Each of these states boasts strong job markets and high metropolitan population sizes.
The geographic spread of top-ranking cities is also worth noting, with 50% of the top ten located on the East Coast, while 20% are on the West Coast, and the remainder spread across the country.
What House Hunters Can Expect in the Coming Months
While it’s hard to predict with any certainty what’s to come for the housing market, rising interest rates and subsequent mortgage rates continue to put pressure on folks looking to purchase in the coming months. Renters in cities with a high ratio of jobs to building permits may continue to encounter stiff competition when applying for housing and inflated rates to account for demand.
Keeping an eye on the Federal Reserve’s interest rate announcements will provide valuable insights into affordability forecasts for the remainder of 2023.
The post New York and San Francisco Among the Cities Getting Hit Hardest by the Housing Crisis first appeared on Wealthy Living.
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