The U.S. cities that are about to become unaffordable

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When you hear affordable cities, there are four that should be familiar to you now: Cincinnati, Charlotte, Pittsburgh, Omaha.

But here's a list of U.S. cities that are rapidly becoming less affordable: Cincinnati, Charlotte, Pittsburgh, Omaha.

In other words, the secret is out. The good news is, many of these places are still affordable — for now. The bad news is that time might be running out.

Data crunchers at RealtyTrac have supplied Credit.com with information on housing affordability for a couple of years now. People exhausted by the rat race in high-cost places like New York and San Francisco are moving to middle-of-the-county havens like Kansas City, where wages and housing prices are more in sync, as we've explored in our True Cost of Living series. It turns out that combination of strong employment and reasonable housing costs make places like Pittsburgh both attractive and financially sensible.

As much as we'd like to claim no one else has made this discovery, plenty of folks are onto the idea. We noticed last year that rental prices in places like Pittsburgh (not to mention Portland) are spiking. Now RealtyTrac data shows that affordability is fast moving in the opposite direction in many of these now-popular places.

RealtyTrac developed its own affordability index, which takes into account factors like median wages, median home prices and property taxes. This data shows that Boone County, Kentucky — near Cincinnati — is 47% less affordable this year than last year, making it the U.S. county with the fastest trajectory toward unaffordability. That's right. Boone County — not Manhattan.

"The trend is toward less affordability, and with interest rates so low there is really no other policy lever that can be pulled to make homes more affordable. At this point either home prices need to flat line or drop, or wages need to jump, to change the trajectory toward less affordable," Daren Blomquist, vice president of RealtyTrac, said.

Here are a few other places you might not expect to see crack the "top 25" list for areas racing toward being unaffordable, and how much less affordable they are this year compared to last.

  • Peoria, Ill. — Tazewell County (31%)
  • Richmond, Va. — Henrico County (29%)
  • Omaha, Neb. — Douglas County (29%)
  • St. Louis, Mo. — St. Louis City County (22%)
  • Charlotte, N.C. — Rowan County (20%)
  • Pittsburgh, Pa. — Washington County (19%)
  • Minneapolis, Minn. — Ramsey County (16%)
  • Toledo, Ohio (16%)
  • Des Moines, Iowa (14%)

"There are certainly some on this list that might be thought of as affordable compared to other markets, but compared to their own historical standard of affordability they are becoming less affordable," Blomquist said.

How Long Before These Areas Become Unaffordable?

The news isn't all bad. Many of these cities will still sound affordable to outsiders. In Polk County, Iowa (Des Moines), the median home sale price in the first quarter this year was $145,000, and that only eats up 22% of median wages. That's good. On the other hand, median home sale prices were up 8% in the past year, while wages went up only 3%. So how long will Des Moines remain affordable for homeowners? That's hard to say.

That same mathematics is repeating itself around the country. In Virginia's Henrico Country (Richmond), prices rose 27%. In Douglas County, Nebraska (Omaha), they are up 38%. In Hamilton County, Ohio (Cincinnati), they're up 33%.

There are other places to find better news, if you know where to look. In some cities, adjoining counties are becoming more affordable while their neighbors are feeling the squeeze. Pittsburgh-area Butler County is 14% more affordable, the data suggests, thanks to housing prices and mortgage interest rates taking a dip. That's also true in Union County, N.C., near Charlotte, where things are 14% more affordable. But even here, the data is tricky to understand. Historically, residents in Union County needed to spend 40% of their wages to buy a home, and now that's dipped to 33% — still a high number.

Overall, more American markets are trending toward unaffordability, RealtyTrac finds. Nationwide, in the first quarter of 2016, the average wage earner needed to spend 30.2% of their monthly wages to make mortgage payments on a median-priced home ($199,000), up from 26.4% of average wages last year. And median home price growth outpaced wage growth in more than 60% of counties.

The share of counties not affordable by their own historic standards jumped from 2% of all counties a year ago to 9% of all counties in the first quarter of 2016. Compare that to 2007-2008, when more than 80% of markets were less affordable than historic norms.

"While the vast majority of housing markets are still affordable by their own historic standards, home prices are floating out of reach for average wage earners in a growing number of U.S. housing markets," Blomquist said. "The recent drop in interest rates has helped to soften the blow of high-flying price appreciation in some markets, but the affordability equation could change quickly if interest rates trend higher and home prices continue to rise faster than wages."

If you're considering buying a home, whether in one of the these locations or somewhere else, it's important to check your credit score first. Doing so can help you have a better understanding of what rates and mortgage plans you may qualify for as well as how much house you can afford. (You can check your two free credit scores, updated each month, on Credit.com.)

Related: 10 cities with the tiniest homes
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The U.S. cities that are about to become unaffordable

10. (Tie) Dallas, Texas: 14 Tiny Houses for Sale

Not everything is bigger in Texas. In fact, tiny homes are catching on throughout the state. Dallas has the 10th highest number in the nation of tiny homes listed for sale — tied with Irving, Texas, and Nashville, Tenn.

Like in many large cities, housing costs are high in Dallas. The city has experienced one of the steepest surges in rental prices in the nation, according to the Zumper National Rent Report for August 2015. Low-price tiny homes might be offering an alternative to high-rent apartments and high-priced homes.

Related: Best (and Worst) States to Buy a Home This Spring

Photo credit: GOBankingRates.com/Courtesy of TinyHouseListings.com

10 (Tie) Irving, Texas: 14 Tiny Houses for Sale

This suburb has as many tiny homes listed for sale as its bigger neighbor, Dallas. High housing costs could be among the reasons.

According to Zillow, monthly rent in Irving is $1,429 — $132 higher than in Dallas. And the median sale price for homes is $175,598.

Photo credit: GOBankingRates.com/Courtesy of TinyHouseListings.com

10. (Tie) Nashville, Tenn.: 14 Tiny Houses for Sale

Nashville is one the many cities where the tiny house movement is growing. In fact, a micro-home community for the homeless was recently created in Nashville, reports USA Today.

However, there are some restrictions on small homes in the city. Zoning laws allow for accessory dwelling units — small structures built on property with a primary structure — according to MusicCityTinyHouse.com. But houses on wheels can only be in areas that allow RV camping.

Photo credit: GOBankingRates.com/Courtesy of TinyHouseListings.com

9. Aurora, Colo.: 18 Tiny Houses for Sale

Housing costs in this city in the Denver metropolitan area aren't as high as in Aurora's bigger neighbor. But there are several tiny home contractors in the area, which might explain why so many tiny homes are listed for sale in Aurora.

Photo credit: GOBankingRates.com/Courtesy of TinyHouseListings.com

8. San Antonio, Texas: 21 Tiny Houses for Sale

One of the big builders of tiny homes, Tiny Texas Houses, is located about 60 miles from San Antonio — which might explain why the city has many tiny homes listed for sale.

Photo credit: GOBankingRates.com/Courtesy of TinyHouseListings.com

7. Memphis, Tenn.: 24 Tiny Houses for Sale

Small home construction company Tennessee Tiny Homes — and sister company, Tiny Happy Homes — are located just outside Memphis, which might explain the high number of small house listings in the Memphis area. In fact, one of Tennessee Tiny Homes' houses has been featured on the FYI TV series, "Tiny House Nation."

Photo credit: GOBankingRates.com/Courtesy of TinyHouseListings.com

6. Denver: 25 Tiny Houses for Sale

Tiny homes were actually the big attraction at the recent Denver Home Show, a testament to the growing popularity of these small structures in the Mile-High City. "Tiny House Nation" has even filmed episodes in Denver, according to The Denver Post.

However, zoning laws in Denver — like in many other cities — don't favor tiny homes. But, city officials have said recently that they're open to discussing rules regarding tiny houses, reports The Denver Post.

Photo credit: GOBankingRates.com/Courtesy of TinyHouseListings.com

5. San Francisco: 26 Tiny Houses for Sale

It's well known that San Francisco is one of the most expensive cities to live in. The median home sales price is nearly $1 million, according to Zillow. With a lack of affordable housing, there is a demand for inexpensive tiny homes.

However, prospective tiny house homeowners should do their research first; San Francisco's zoning codes make it difficult to have a tiny home legally.

Photo credit: GOBankingRates.com/Courtesy of TinyHouseListings.com

4. Oakland, Calif.: 31 Tiny Houses for Sale

Housing costs also are high in San Francisco's neighbor to the East, Oakland, which recently saw rent prices surge 20 percent, according to the Zumper National Rent Report. As a result, it seems that tiny homes are growing in popularity as an affordable alternative.

But, zoning laws make it difficult to find a place to park or build a tiny home legally, too. Despite the obstacles, tiny house enthusiasts abound in Oakland. The East Bay Tiny House Enthusiasts group has more than 1,000 members.

Photo credit: GOBankingRates.com/Courtesy of TinyHouseListings.com

3. Austin, Texas: 50 Tiny Houses for Sales

Austin residents who are renting might want to consider becoming first-time homeowners — tiny house homeowners, that is. Austin was the second fastest-growing rental market in the U.S., with rental prices jumping 17 percent, according to the Zumper National Rent August 2015 Report. As a result, there's been a push in the city for more affordable housing.

Photo credit: GOBankingRates.com/Courtesy of TinyHouseListings.com

​2. Seattle: 64 Tiny Houses for Sale

The growth in tiny homes might be fueled by the high cost of housing in Seattle, which has the 10th highest median rent for one-bedroom apartments in the nation, according to Zumper, and a median home sale price of $515,561, according to Zillow.

Seattle created a village of tiny homes and opened it in early 2016 for those least able to afford the city's high housing costs: the homeless, reports local news station KIRO 7.

Photo credit: GOBankingRates.com/Courtesy of TinyHouseListings.com

1. Portland, Ore.: 87 Tiny Houses for Sale

Portland is considered to be a hotbed of tiny homes (it's also the best U.S. city for saving money). There are likely many reasons why the tiny house movement has caught on here.

For starters, the median rent is among the top 20 highest in the nation, according to the Zumper National Rent Report. And the median sale price of homes in Portland is $332,600, according to Zillow.

Portland's zoning rules are also friendlier to tiny homes compared to other areas. There also are plenty of resources for tiny home enthusiasts — including lecture series and workshops — and the Build Small, Live Large small house summit was held in Portland in 2015.

Keep Reading: 10 Tiny Homes for Retirees

Photo credit: GOBankingRates.com/Courtesy of TinyHouseListings.com

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