Buy Here, Not There: The 10 Best and Worst Places to Mortgage a House

California Dreamin’ comes at a price: the median home buyer takes out a mortgage up to four times his or her expected yearly salary. The Golden State boasts three of the top five cities on the list of places where people must stretch their budget to afford a home, while the Midwest reigns supreme in bang for your buck in the housing market, according to a report by LendingTree.

The places where buyers are stretching the upper limits of their budgets to become homeowners aren't where most folks would expect. Uber-pricey New York City didn't even crack the top 10.

Instead, Los Angeles topped the list, according to a recent report from financial services marketplace LendingTree. An expensive city in its own right, Tinseltown inspired buyers to take out median mortgages for nearly four times—$485,000—their median income of just $124,000.

The rule of thumb is not to spend more than three times your annual salary on the total price of a home. But that's becoming harder in many of the country's most expensive cities, particularly in high-cost California.

"In Los Angeles, people are stretching themselves the most to be able to afford a home," says Jacob Channel, a research analyst at LendingTree. "What it boils down to is people there just aren't making as much as they would be in, say, San Francisco."

To come up with its findings, LendingTree looked at the median mortgage sizes as well as the median incomes of buyers in the 50 largest cities and their surrounding suburbs. LendingTree analyzed Home Mortgage Disclosure Act data to do so.

Read More