For much of the last decade, economic developers in cities have competed on tax incentives, workforce training programs, and infrastructure investment to attract new residents and businesses. But as housing costs climbed across much of the country, another factor increasingly shaped where people and jobs ultimately moved: whether workers could afford to live there. Analyzing 75 major U.S. metro areas, we found that many of the regions that captured the most job growth over the last decade were places where housing was still attainable for working households, a trend accelerated by pandemic-era migration patterns. This dynamic contributed to rapid growth across many Sunbelt metros, while higher-cost coastal markets grew more slowly. Today, however, the affordability advantage that helped drive growth in the Sunbelt is beginning to erode.
Key findings from the analysis include:
- Housing affordability shaped where job growth occurred over the last decade. Metros with relatively affordable housing at the start of the decade generally experienced stronger job growth in the years that followed, while many of the nation's highest-cost housing markets saw slower growth.
- The pandemic accelerated this geographic reshuffling of growth. Before COVID-19, several expensive coastal metros were growing as quickly as or faster than many affordable Sunbelt peers. After the pandemic altered migration and work patterns, growth increasingly shifted toward lower-cost regions.
- Affordability became a competitive advantage. As households and businesses relocated, metros that offered attainable housing and added new supply were better positioned to attract workers, support business expansion, and capture a disproportionate share of national job growth.
- Growth often came at the expense of affordability. Many of the metros that experienced the strongest job growth initially benefited from relatively affordable housing, but rising demand pushed housing costs up faster than local wages. Across the 75 metros analyzed, the places that gained the most jobs also experienced some of the largest declines in affordability.
- The Sunbelt's affordability advantage is now narrowing. As housing costs rise faster than wages and housing production becomes more difficult, many fast-growing Sunbelt metros risk losing one of the key advantages that helped attract residents, workers, and businesses over the past decade.
Relatively Affordable Metros Captured Job Growth
The metros that captured the most job growth over the last decade were often places where housing was affordable relative to local wages. This gap, between job growth in more and less affordable metros, has only widened over time.
To understand this relationship, we analyzed each metro's price-to-wage ratio: the median home price divided by average annual wages. The metric measures how many years of typical local earnings it takes to purchase the median-priced home and provides a useful benchmark for understanding housing affordability across regions.
Many of the metros with lower price-to-wage ratios in 2014 experienced stronger job growth over the following decade, while many of the country's most expensive housing markets experienced slower growth. The relationship between the price-to-wage ratio and job growth isn't strictly linear. Some higher-cost metros, including Salt Lake City, Riverside, and Fresno, saw strong job growth despite mid-range or higher housing costs. Similarly, several affordable Rust Belt metros experienced little job growth or continued declines over the same period.
The relationship is clear at the extremes. Once a market's price-to-wage ratio climbs above roughly 7x, job growth generally falls toward zero. Between 5x and 7x, outcomes vary. Below 5x, most metros added jobs at strong and sustained rates.
Between 2019 and 2024, Dallas, Charlotte, Nashville, Phoenix, and Austin, all of which had a 2014 price-to-wage ratio below 5x, added jobs at roughly 2% to 3.5% per year. Over the same window, New York, San Francisco, Los Angeles, and Honolulu, all with price-to-wage ratios above the 5x threshold, averaged near-zero or negative growth. Every one of the ten fastest-growing major metros over that five-year stretch had a 2014 price-to-wage ratio below 5x.
The pattern also has a striking spatial dimension. Coastal cities such as New York, San Francisco, and Los Angeles were already deeply unaffordable in 2014 and grew slowly or saw continued job declines in the period following the pandemic. Sunbelt cities such as Phoenix, Raleigh, and Austin were still affordable for working households in 2014, and captured most of the net job growth of the last five years.
The Pandemic Rewrote the Map
The relationship between affordability and job growth becomes more complicated when we look at the years before the pandemic.
From 2015 to 2019, many of the country's most expensive metros were growing as quickly as, or even faster than, their more affordable Sunbelt peers. San Francisco added jobs at roughly 2.3% annually, while New York, Boston, and Los Angeles each grew by roughly 1.6% to 1.7% per year. Looking at the pre-pandemic period alone, the relationship between affordability and job growth weakens; in many cases, it reverses.
The divergence emerged after COVID-19 fundamentally reshaped where people lived and worked. As remote and hybrid work expanded and migration patterns accelerated, households and businesses increasingly moved toward lower-cost regions. Many Sunbelt metros became the primary beneficiaries of that shift.
When metros are grouped by region, geography explains far more of the variation than affordability alone. The 9-point median gap in employment recovery between Sunbelt and coastal metros is substantially larger than differences between affordability tiers within the same region. Affordable and expensive coastal metros generally performed similarly, as did affordable and expensive Sunbelt metros. The major distinction is regional.
The exceptions remain at the extremes. Ultra-high cost coastal metros like San Francisco and Honolulu continued to struggle to regain their pre-pandemic employment levels by 2025, while several affordable Rust Belt metros faced separate economic challenges that constrained growth.
The implication is important: housing affordability did not cause coastal metros to lose jobs. The pandemic did. But affordability helped determine where those jobs, workers, and businesses went next. In that sense, affordability functioned less as the cause of the reshuffling and more as a competitive advantage for the regions best positioned to absorb it.
Why Housing Costs Are an Economic Development Problem
When housing gets more expensive in a city, it becomes harder and more expensive to attract and retain workers.
When cost burdens get too high or buying a first home stops being a realistic option, people eventually move to places where it still is. Over the past decade, that shift shows up clearly in the migration data. Households increasingly left high-cost coastal markets in favor of Sunbelt metros where housing remained more attainable. Between 2014 and 2023, migration from New York to Charlotte increased by 61%, while moves to Dallas increased by 59% and moves to Tampa increased by 51%. Migration from Los Angeles to Dallas increased by 83%, while moves to Phoenix and Houston grew by 45% and 47%, respectively.
For businesses, those household decisions matter. Employers are not only competing with other local employers for workers, they are also competing against lower-cost regions that offer many workers a more attainable path to homeownership and a lower overall cost of living.
As housing costs rise faster than wages, recruiting and retaining talent becomes more expensive. Employers must either increase compensation to offset rising housing costs or accept a smaller labor pool. Over time, those pressures can influence decisions about where firms expand, invest, and create jobs.
Throughout the 2010s, as housing costs in many coastal metros rose substantially faster than incomes, some businesses faced a growing economic incentive to expand in lower-cost markets rather than continue growing in places where housing affordability had significantly deteriorated.
Academic research by Giacoletti, Korevaar, and Qian (2026) provides causal evidence for this underlying mechanism. Studying the Dutch Vinex program, a nationally planned housing expansion that added ~500,000 homes near major cities in the late 1990s and 2000s, they find that neighborhoods with new housing supply saw 14% stronger employment growth than comparable areas without it. When workers can afford to live somewhere, they move there. When they move there, employers follow. The US data shows the same dynamic playing out in reverse: as housing affordability declines, regions become less effective at attracting and retaining workers.1
The Sunbelt's Advantage Is Now Eroding
As migration accelerated and job growth concentrated in Sunbelt markets, housing demand rose rapidly. When demand outpaces supply, prices rise. In many of the Sunbelt metros that added jobs fastest, housing costs increased far more quickly than incomes, pushing price-to-wage ratios steadily higher.
The pattern was not random: across the 75 metros analyzed, the places where affordability worsened the most were also among those that gained the most jobs. In other words, affordability erosion largely followed growth, not the other way around. The same Sunbelt metros that benefited most from the pandemic-era reshuffling are also the ones where housing costs have risen fastest relative to local wages.
Every Sunbelt metro in this analysis is less affordable today than it was a decade ago. Phoenix's price-to-wage ratio rose from roughly 4x to more than 6x. Miami climbed from below 4x to more than 6x. Even Dallas, one of the most affordable large metros at the start of the decade, experienced a significant increase. The gap between Sunbelt and coastal housing markets has narrowed as once-affordable metros become increasingly expensive.
At the same time, maintaining affordability is becoming more difficult. Higher interest rates, rising construction costs, insurance costs, and financing constraints have made it harder to add new housing supply, even in these regions that have historically built at scale. As a result, the same affordability advantage that helped fuel growth is becoming increasingly difficult to preserve. If these regions cannot expand housing opportunities for new and existing residents, they risk losing one of their most important competitive advantages.
What This Means for Economic Development
Affordable housing has traditionally been treated as a social policy issue: important but separate from the economic development work of growing jobs and attracting investment. The last decade suggests otherwise, as the metros that captured much of the nation's growth benefited from a realistic path to homeownership for its workers. As that advantage erodes, so does part of what made those regions attractive in the first place.
Housing affordability is a precondition for economic competitiveness, and the business community has as much at stake in solving it as the housing community does.
For business leaders, chambers of commerce, economic developers, and housing advocates, that has important implications. A region's ability to attract workers, retain talent, and support long-term business growth increasingly depends on whether people can afford to live there.
Preserving affordability will require collaboration across sectors. The housing community cannot solve this challenge alone, and neither can the business community. Regions that successfully align housing production, economic growth, and workforce needs will be better positioned to compete in the decades ahead.