New research from Trulia reveals that nationally, 59 per cent of homes for sale are within reach of the middle class, as of October 2014, compared with 62 per cent in October 2013. House prices still look undervalued compared with fundamentals and historically low mortgage rates make buying much cheaper than renting. Despite this, though, affordability is a growing problem.Where can the middle class bear the cost of buying a home? Trulia measures affordability as the total monthly payment, including mortgage, insurance, and property taxes, being less than 31 per cent of the metro area’s median household income. (See note below.) Despite high household incomes, San Francisco is ranked as the least affordable metro, with just 15 per cent of homes within reach of the middle class. Affordability has deteriorated over the past year in Austin and Miami. The most affordable markets are near the Great Lakes.For instance, in metro Atlanta, median household income is $55,000. Homes priced under $276,000 are affordable. As of November 7th 2014, 71 per cent of the homes for sale in Atlanta were listed for less than $276,000. That means that more than two-thirds of metro Atlanta homes are within reach of the middle class.The five most affordable markets are in Ohio, Indiana, and upstate New York. In those markets, more than 80 per cent of homes for sale are within reach of the middle class. Six of the seven least affordable markets are in California. Bucking the trend are Washington, DC and the Bethesda metro next door, where incomes are high and more than 60 per cent of homes are within reach of the middle class.

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