San Rafael is the third most expensive place to live in the United States, according to a U.S. News & World Report ranking of more than 850 cities first reported by Patch on Aug. 21.

Only two Orange County communities ranked higher: Westminster at No. 1 and Newport Beach at No. 2. All three of the priciest cities are in California, and 10 of the top 15 are in the state.

The ranking does not simply measure home prices. It compares median incomes with local housing costs, meaning a city where residents earn more modest incomes but face steep housing prices can rank as more expensive than a wealthier community where incomes better keep pace with costs.

Westminster, for example, has a median home value of $855,339 and a median income of $87,310. Newport Beach has a median home value of $2,408,436 and a median income of $165,385.

San Rafael-specific income and home-value figures from the U.S. News ranking were not publicly available as of Aug. 23, but other local housing data shows how expensive the broader area has become.

Across Marin County, the median single-family home price reached $1.81 million in May, according to NBC Bay Area, citing California Association of Realtors figures. That was unchanged from April but down 4% from a year earlier.

California's housing affordability challenges extend well beyond Marin. The state's Legislative Analyst's Office reported in its second-quarter 2026 housing affordability tracker that California mid-tier home prices were about $775,000, more than twice the price of a typical mid-tier U.S. home.

About 44% of California households would likely qualify for a bottom-tier home mortgage in 2026, down from 57% in 2019. In June, the estimated monthly mortgage payment for a two-bedroom California home was about $4,600, compared with roughly $2,700 in rent for a comparable unit.

The ranking also arrives as San Rafael faces broader fiscal pressures.

The City Council adopted a $208.2 million budget in June, according to the Marin Independent Journal, while city officials are pursuing a November ballot measure that would raise the city's real property transfer tax from 0.2% to 1%. Officials estimate the increase would generate about $6 million in additional annual revenue.

Rounding out the top 10 most expensive cities are Spring Valley, New York, at No. 4; El Cajon, California, at No. 5; Atlantic City, New Jersey, at No. 6; Huntington Park, California, at No. 7; Lawrence, Massachusetts, at No. 8; Inglewood, California, at No. 9; and Glendale, California, at No. 10.

San Rafael voters will decide on the proposed transfer tax increase in November.