Livermore, Pleasanton, Danville, Short Sale Specialist

Home buyers can’t catch a break. Not only is it becoming harder to get a mortgage, but real estate prices have risen so much this year that many buyers—much like during the housing bubble—can no longer afford the home in the first place.

Median-income households can afford a median-priced home in just eight of the 25 largest metropolitan areas in the U.S., according to data released this week by, which tracks consumer credit. That’s down from 14 of 25 a year ago. On a larger scale, the study found that it is harder to afford a home in all 25 metro areas. The findings support those of a similar study released earlier this month by Trulia, an online real estate marketplace, which found that home prices were increasingly falling out of reach for many middle-class buyers. In 14 of the top 100 metro areas, more than half of for-sale listings in early October were too expensive for these buyers.

The study underscores the impact the recent spike in home sales is having on regular home buyers. For much of this year, buyers have been re-entering the housing market, eager to purchase a home before mortgage rates rise further. But for-sale listings have been limited as investors who have been snatching up homes are turning them into rentals (rather than selling them to would-be owners), and by homeowners who are holding off listing their properties in the hope that prices rise even further in the next few months.

In addition, buyer frenzy to get in before mortgage rates spike has backfired on, well, the buyers. Many “have been so desperate to buy something that they are bidding each other out,” says Eric Tan, a Los Angeles-based listing agent with Redfin, a national brokerage. Tan says buyers he has worked with have gone to extremes telling him they will match any offers he gets—effectively bidding against themselves—and waiving clauses in contracts that are supposed to protect them.

Still, the hype may not last. Fed up with rising prices, buyers have started retreating in recent weeks, agents say. And sellers in some markets have gotten the timing wrong and are listing now in anticipation that buyer demand has not abated.

For buyers, the main issue is that the math just doesn’t add up. Home price gains are outpacing the rate at which income is rising. While that was often the case during the housing bubble, it was a lot easier to get a mortgage with little or no cash down. In addition, as mortgage rates rise, the buyers can no longer get approved for as large loans.

Here are the metro areas where affordability has declined the most over the past year.

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