Most expensive housing markets From a Coldwell Banker: Where a four-bedroom, 2,200 square foot home costs the most. Click on city name for a snapshot report. Market  Price  La Jolla, CA  $1,875,000  Santa Monica, CA  $1,766,666  Beverly Hills, CA  $1,656,500  Santa Barbara, CA  $1,603,750  Palo Alto, CA  $1,550,000  Newport Beach, CA  $1,499,000  San Mateo, CA  $1,334,425  San Francisco, CA  $1,300,000  San Jose, CA  $1,272,625  Greenwich, CT  $1,267,500   Source:  Coldwell Banker

Least expensive cities From Coldwell Banker: Where do houses cost the least? Click on city name for snapshot report. Market  Price  KIlleen, TX  $131,328  Minot, ND  $133,266  Beckley, WV  $137,875  Arlington, TX  $139,510  Billings, MT  $142,500  Tulsa, OK  $142,600  Parkersburg, WV  $146,000  Fort Worth, TX  $148,610  Yankton, SD  $149,521  Grayling/Roscommon, MI  $149,600   Source:  Coldwell Banker

NEW YORK (CNN/Money) - Although earnings have risen about 2.6 percent, housing is even less affordable for first-time buyers than it was a year ago, according to the latest findings from the National Association of Realtors.

The NAR found that the average price nationally for a starter home rose to $183,500 in the third quarter, up $23,500 in the past year.

With a 10 percent down payment and a mortgage rate of 5.83 percent (the average in the quarter), the monthly cost to finance the purchase of the average starter home would be $999 a month.

A new homebuyer would need income of $47,952 to qualify for such a mortgage, but the median income of first-time buyers was just $32,781 nationwide last quarter, yielding an affordability index value of 68.4 -- down from 74.8 a year ago and 80.9 for all of 2003.

According to other surveys, home affordability has fallen even more drastically in some of the hottest U.S. markets. According to the California Association of Realtors, the situation is particularly dismal in that state.

The CAR report, which covered all houses, not just starter homes, revealed that a homebuyer in the state would need annual income of $133,800 -- factoring in a 20 percent down payment and interest rate of 5.87 percent -- to afford a median home ($568,890 through August 31). Only about 14 percent of Californians had that much income.

Since the NAR data was compiled, mortgage interest rates have jumped considerably and have made already expensive housing even less affordable for working Americans.

At the beginning of July, a 30-year fixed-rate mortgage carried a rate of about 5.53 percent. The national average is now 6.3 percent, according to Freddie Mac. That has added nearly $100 a month to interest payments on a $200,000 mortgage.

That extra $100 means borrowers can not afford to pay as much for a house; they might have to settle for one costing about $15,000 less or find some other way to make up the shortfall.

Bob Moulton, founder of Americana Mortgage Group, said the higher rates have already had a significant impact on his business. "Monday morning is usually my busiest time," he said. "I've had only a half dozen applications today."

For homeowners with existing adjustable-rate mortgages, the rise in interest rates comes as especially bad news. When the rates to these loans adjust higher, monthly bills can leap. Homeowners with interest-only ARMs may see an especially large increase.

Moulton says that for some ARMs that have recently come up for adjustment, the adjusted rates were actually higher than the rates for 30-year fixed-rate mortgages.

These trends point to a softening housing market, especially in the especially overheated markets. It also could spell trouble for the overall economy since cash from refinancing has helped fuel consumer spending, which has, in turn, helped prop up the economy.

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