12 cities where housing bubble fears are growing

An improving economy and spiking mortgage rates are hindering people's ability to afford a house.

Data from the third quarter of 2018 showed home prices hitting their lowest level of affordability since 2008, according to Attom Data Solutions' Home Affordability Report. More than three-quarters of the 440 counties analyzed in the report posted an affordability index below their historical averages.

"Rising mortgage rates have pushed home prices to the least affordable level we've seen in 10 years, both nationally and at the local level. Close to one-third of the U.S. population now lives in counties where buying a median-priced home requires at least $100,000 in annual income," Daren Blomquist, senior vice president at Attom Data Solutions, said in a press release.

To determine affordability, the amount of income needed to make monthly house payments was calculated, assuming a 3% down payment and a 28% maximum front-end debt-to-income ratio.

Here's a look at the 12 cities with the biggest gap between the current wages needed to buy a home and the historical average. The data, from Attom, is based on counties with at least 500 home sales and where the annual income needed to buy is greater than the local average salary.

Multiple counties in the Denver-Aurora-Lakewood, Colo., and San Francisco-Oakland-Hayward, Calif., metropolitan statistical areas made the list and are combined in the rankings.

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Bill Bogusky - Fotolia

12. Boulder, Colo.

Boulder County
Median sales price: $508,750 (+6% YoY)
Local average income: $65,234 (+3% YoY)
Actual income needed to afford a home: $139,076
Share of local average income needed to buy a home (3Q18): 59.7%
Share of local average income needed to buy a home (historic): 48.1%
Difference: 11.6 percentage points
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Downtown Boise from the top of a parking garage
Robert Crow/vividcorvid - Fotolia

11. Boise City, Idaho

Canyon County
Median sales price: $212,500 (+17% YoY)
Local average income: $36,153 (+2% YoY)
Actual income needed to afford a home: $61,378
Share of local average income needed to buy a home (3Q18): 47.5%
Share of local average income needed to buy a home (historic): 35.8%
Difference: 11.7 percentage points
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Afternoon aerial view of Santa Rosa Valley homes and hillsides in scenic Camarillo California.
trekandphoto - stock.adobe.com

10. Santa Rosa, Calif.

Sonoma County
Median sales price: $610,000 (+6% YoY)
Local average income: $52,858 (+4% YoY)
Actual income needed to afford a home: $170,683
Share of local average income needed to buy a home (3Q18): 90.4%
Share of local average income needed to buy a home (historic): 78.6%
Difference: 11.8 percentage points
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Houston Texas modern skyline at sunset twilight from park lawn
Tono Balaguer/Tono Balaguer - stock.adobe.com

9. Houston-The Woodlands-Sugar Land, Texas

Fort Bend County
Median sales price: $286,950 (+9% YoY)
Local average income: $51,246 (+2% YoY)
Actual income needed to afford a home: $98,602
Share of local average income needed to buy a home (3Q18): 53.9%
Share of local average income needed to buy a home (historic): 41.7%
Difference: 12.2 percentage points
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aerial view of Fort Collins downtown in sunrise light, shot from a low flying drone
Marek Uliasz/Marek - Fotolia

8. Fort Collins, Colo.

Larimer County
Median sales price: $370,000 (+8% YoY)
Local average income: $50,739 (+3% YoY)
Actual income needed to afford a home: $100,422
Share of local average income needed to buy a home (3Q18): 55.4%
Share of local average income needed to buy a home (historic): 43.2%
Difference: 12.2 percentage points
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Waldteufel - stock.adobe.com

7. Urban Honolulu, Hawaii

Honolulu County
Median sales price: $598,613 (+6% YoY)
Local average income: $52,130 (+2% YoY)
Actual income needed to afford a home: $158,948
Share of local average income needed to buy a home (3Q18): 85.4%
Share of local average income needed to buy a home (historic): 72.3%
Difference: 13 percentage points
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6. Greeley, Colo.

Weld County
Median sales price: $330,000 (+7% YoY)
Local average income: $49,699 (+5% YoY)
Actual income needed to afford a home: $89,080
Share of local average income needed to buy a home (3Q18): 50.2%
Share of local average income needed to buy a home (historic): 37.1%
Difference: 13.1 percentage points
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videowerx66 - stock.adobe.com

5. Dallas-Fort Worth-Arlington, Texas

Denton County
Median sales price: $312,188 (+12% YoY)
Local average income: $50,102 (+1% YoY)
Actual income needed to afford a home: $100,255
Share of local average income needed to buy a home (3Q18): 56%
Share of local average income needed to buy a home (historic): 42.6%
Difference: 13.5 percentage points
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Drone photo of sunset over downtown San Jose in California
Uladzik Kryhin/Uladzik Kryhin - stock.adobe.com

4. San Jose-Sunnyvale-Santa Clara, Calif.

Santa Clara County
Median sales price: $1,190,000 (+2% YoY)
Local average income: $129,207 (+7% YoY)
Actual income needed to afford a home: $327,284
Share of local average income needed to buy a home (3Q18): 70.9%
Share of local average income needed to buy a home (historic): 57.4%
Difference: 13.5 percentage points
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The Manhattan Bridge in New York, New York.
moussa81 - Fotolia

3. New York-Newark-Jersey City, N.Y.-N.J.-Pa.

Queens County
Median sales price: $630,000 (+9% YoY)
Local average income: $52,611 (+3% YoY)
Actual income needed to afford a home: $177,541
Share of local average income needed to buy a home (3Q18): 94.5%
Share of local average income needed to buy a home (historic): 80.6%
Difference: 13.9 percentage points
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Andrew - stock.adobe.com

2. Denver-Aurora-Lakewood, Colo.

Arapahoe County
Median sales price: $354,700 (+7% YoY)
Local average income: $64,974 (+3% YoY)
Actual income needed to afford a ho: $97,560
Share of local average income needed to buy a home (3Q18): 42%
Share of local average income needed to buy a home (historic): 30.5%
Difference: 11.5 percentage points

Jefferson County
Median sales price: $415,000 (+9% YoY)
Local average income: $56,823 (+3% YoY)
Actual income needed to afford a home: $113,158
Share of local average income needed to buy a home (3Q18): 55.8%
Share of local average income needed to buy a home (historic): 41.6%
Difference: 14.1 percentage points

Adams County
Median sales price: $340,000 (+10% YoY)
Local average income: $53,443 (+2% YoY)
Actual income needed to afford a home: $93,047
Share of local average income needed to buy a home (3Q18): 48.7%
Share of local average income needed to buy a home (historic): 34.4%
Difference: 14.3 percentage points

Denver County
Median sales price: $430,000 (+9% YoY)
Local average income: $68,419 (+3% YoY)
Actual income needed to afford a home: $117,148
Share of local average income needed to buy a home (3Q18): 47.9%
Share of local average income needed to buy a home (historic): 33.4%
Difference: 14.6 percentage points
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View of colorful San Francisco row homes looking down a steep city street
Andy Konieczny/Focqus, LLC - stock.adobe.com

1. San Francisco-Oakland-Hayward, Calif.

Contra Costa County
Median sales price: $615,000 (+10% YoY)
Local average income: $67,860 (+3% YoY)
Actual income needed to afford a home: $174,423
Share of local average income needed to buy a home (3Q18): 72%
Share of local average income needed to buy a home (historic): 58.5%
Difference: 13.4 percentage points

San Mateo County
Median sales price: $1,375,000 (+12% YoY)
Local average income: $119,119 (+8% YoY)
Actual income needed to afford a home: $377,210
Share of local average income needed to buy a home (3Q18): 88.7%
Share of local average income needed to buy a home (historic): 74.7%
Difference: 14 percentage points

Alameda County
Median sales price: $850,000 (+13% YoY)
Local average income: $74,607 (+4% YoY)
Actual income needed to afford a home: $237,760
Share of local average income needed to buy a home (3Q18): 89.2%
Share of local average income needed to buy a home (historic): 67.5%
Difference: 21.7 percentage points
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