Home Loans

LendingTree Study Reveals the Most Stretched Homebuyers in America for 2019

A common rule of thumb suggests that the price of a home should not exceed three times a buyer’s annual income. By keeping this rule in mind, buyers can avoid putting themselves in situations where their monthly mortgage payment is too high for them to manage. 

Unfortunately, in order to confront the challenge of rising home prices, many buyers will need to take out a large mortgage loan to cover the cost of their home. This is especially true in areas like San Francisco and Los Angeles where real estate prices have risen steadily over the past several years. While low interest rates can help make tackling a large loan more manageable, high prices still result in relatively high monthly mortgage payments. Buyers will likely still stretch their budgets in order to be able to afford their homes.

To see where borrowers are stretching the most to buy homes, LendingTree, the nation’s leading online loan marketplace, has looked at how much leverage buyers have in the nation’s 50 largest cities. Leverage refers to the ratio of how much money is borrowed to how much income a person has. In other words, our study looks at the places where people are taking out the largest home loans relative to their incomes.

To rank the cities, we calculated leverage ratios by dividing the median mortgage loan amount by the median income in a given area. This yielded what we call a “leverage ratio.” The higher the leverage ratio, the more challenges a buyer is likely to face in paying off a home loan. However, all borrowers are unique, and their homebuying capacity depends on additional factors, such as credit scores, other debt currently held and down payment amount.

For 2018 results, see our previous study here

Key findings

  • Five of the top 10 cities where buyers are stretching themselves the most are in California. Though there is some speculation that the housing boom in California may be nearing its end, home prices in the state are still high. As a result, many buyers, especially those who don’t work in lucrative industries like tech, will take out large loans to cover the cost of their homes.
  • Since last year, Los Angeles and San Diego have remained the 2 cities where borrowers have to stretch their budgets the most. The leverage ratios in these two cities are 3.91 and 3.64, respectively. 
  • Salt Lake City is the place with the highest leverage ratio not in California. A housing shortage is one of the key reasons buyers in Salt Lake may need to stretch their budgets so much in order to be able to afford a home. 
  • Like last year, homes in the Rust Belt and the South are the most affordable in the nation. The average home price in our 10 most affordable cities is a bit more than $171,000, which is $90,000 less than the average home price for the whole nation. Furthermore, the leverage ratio in the most affordable cities is 2.25, compared with a ratio of 2.81 for the whole country.
  • Pittsburgh, Cleveland and Detroit are where buyers are taking the smallest loans relative to their incomes. An average leverage ratio of 2.08 could make these cities attractive to potential homebuyers.

The most leveraged cities in America 

1. Los Angeles

  • Leverage ratio: 3.91
  • Median mortgage amount: $485,000
  • Median borrower income: $124,000

2. San Diego

  • Leverage ratio: 3.64
  • Median mortgage amount: $455,000
  • Median borrower income: $125,000

3. Salt Lake City 

  • Leverage ratio: 3.53
  • Median mortgage amount: $265,000
  • Median borrower income: $75,000

4. San Francisco

  • Leverage ratio: 3.51
  • Median mortgage amount: $885,000
  • Median borrower income: $252,000

5. Denver

  • Leverage ratio: 3.48
  • Median mortgage amount: $345,000
  • Median borrower income: $99,000

The least leveraged cities in America

1. Pittsburgh

  • Leverage ratio: 2.04
  • Median mortgage amount: $155,000
  • Median borrower income: $76,000

2. Cleveland

  • Leverage ratio: 2.07
  • Median mortgage amount: $145,000
  • Median borrower income: $70,000

3. Detroit

  • Leverage ratio: 2.14
  • Median mortgage amount: $135,000
  • Median borrower income: $63,000

4. Cincinnati (tie)

  • Leverage ratio: 2.26
  • Median mortgage amount: $165,000
  • Median borrower income: $73,000

4. Indianapolis (tie) 

  • Leverage ratio: 2.26
  • Median mortgage amount: $165,000
  • Median borrower income: $73,000

4. St. Louis (tie)

  • Leverage ratio: 2.26
  • Median mortgage amount: $165,000
  • Median borrower income: $73,000

Refinancing can help you tackle a big loan

Taking out a large loan relative to one’s income can create many challenges, like high monthly mortgage payments and a higher total amount of interest paid over the life of the loan. Fortunately, refinancing can help buyers face these challenges. 

While it can vary from person to person, refinancing can save a borrower tens of thousands of dollars over the course of a loan. For example, if one were to take out a median loan of $485,000 in Los Angeles with a “fair” credit score and then refinance a year later after they brought their credit score up to the “good” level, they could save $218 on their monthly payment and $42,554 over the life of their loan at today’s current rates (assuming they stay in their home for at least the next several years). 

If that same person wanted to refinance their loan from a 30-year loan to a 15-year, then they would save $208,168 over the course of their loan, though their monthly payment would increase by more than $1,000. 

While serious savings are possible, it is important to note that not everyone will necessarily benefit from refinancing, and the amount a person can save will vary. This is especially true for those who are not planning on staying in their homes for very long, as the costs associated with refinance (ranging from 2-6% of the total mortgage loan) may take a few years before they are offset by reduced monthly payments. For more information on what refinancing is and when it might be appropriate to refinance, check out LendingTree’s refinance page.


To determine the cities with the most leveraged homebuyers, LendingTree looked at Home Mortgage Disclosure Act (HMDA) data. HMDA requires lenders to report their origination activities every year. From this HMDA data, which represents more than 6.3 million home loans originated in 2018, the median amount borrowed was divided by the median income for all purchases in the HMDA database for each city as defined by the Core-Based Statistical Area (CBSA).


Today's Mortgage Rates

  • 2.476%
  • 2.392%
  • 2.976%
Calculate Payment
Advertising Disclosures Terms & Conditions apply. NMLS#1136