In this October edition of the RealtyHop Housing Affordability Index, we examine what American households across the 100 largest cities need to spend on housing to find out:
Is homeownership affordable or possible for the average American family?
Mortgage rates continued to ease following the Federal Reserve’s latest rate cut, reaching their lowest level since 2022. However, with the 30-year fixed rate still hovering above 6%, coupled with high home prices and economic uncertainty, buyers are seeing little relief. As always, those thinking about buying should consult with local market experts to understand specific pricing in their area.
Key Findings:
- Households in 68 out of the 100 major cities we analyzed would have to spend over 30% of their annual household income to own a median home in the area.
- For 14 cities in the index, homeowners must spend over 50% of their income on homeownership costs, indicating severe unaffordability.
- This month, Toledo, OH remains the most affordable housing market.
- California remains unaffordable for average Americans. 7 of the 10 least affordable markets are located in California. This month, Governor Gavin Newsom signed Senate Bill 79, and while most of the California cities in our index saw a slight drop in monthly housing costs this month, the law will not go into effect until July 2026.
- Buyers in Cleveland, OH, Toledo, OH, and Detroit, MI remain the only three cities in the study where monthly homeownership payments sit below $1,000.
The 5 Least Affordable Housing Markets
1. Los Angeles, CA
Los Angeles remains the country’s least affordable housing market. The city saw a drop in the share of income needed to be allocated towards housing, and families can now expect to spend $6,190.38 monthly for a home with the median list price of $1,129,000.
2. Irvine, CA
Irvine is the second least affordable U.S. city in our rankings this month. Households with a median income can expect to spend $6,190.38 monthly on mortgage payments and property taxes, equating to 78.42% of the annual household income.
3. Miami, FL
Miami remained the third least affordable housing market this month. Households making the median income of $65,231 will need to spend 73.56% of it towards homeownership costs. Miami saw the smallest change in homeownership costs of the top least affordable housing markets in our study.
4. New York, NY
New York City held onto its spot as the fourth least affordable city, with the list price of $895,000. Potential buyers should expect to spend $4,933.34 monthly on homeownership costs.
5. Newark, NJ
Newark remained steady as the fifth least affordable housing market. With a median list price of $449,000, an average family in Newark should expect to direct 65.28% of their income towards owning.
The 5 Most Affordable Housing Markets
1. Toledo, OH
Toledo continues to rank as the most affordable city in the U.S. Households making the median income of $52,207 should expect to spend $802.17 on their monthly mortgage payments and property taxes.
2. Detroit, MI
Detroit remains one of the most affordable housing markets in the country. With a median list price of $110,000, households only need to allocate $672.32 a month on homeownership expenses.
3. Cleveland, OH
Cleveland rose one spot in the rankings to become the fourth most affordable housing market this month. Prospective buyers need to spend 21.68% of their income on homeownership costs. Out of the top five most affordable cities in our index, Cleveland saw the biggest increase in affordability this month as the median home price decreased to $125,000.
4. St. Louis, MO
St. Louis fell one spot in the rankings to become the fourth most affordable housing market. Homeowners would need to direct 21.68% of their income towards owning a home with the median price of $189,000.
5. Kansas City, MO
Kansas City remains the fifth most affordable housing market. The median list price sits at $246,500 and households can now expect to spend $1,453.53 monthly on mortgage payments and property taxes.
Housing Markets to Watch
The following housing markets witnessed significant changes this month:
Pittsburgh, PA
Pittsburgh became more affordable for prospective buyers this month, dropping to the 84th spot in our ranking. Households with a median income of $70,445 can expect to spend $1,518.73 monthly on mortgage payments and property taxes. The housing market in Pittsburgh remains strong, with the Downtown Pittsburgh area slated to see more condo sales than in previous years. Additionally, Charter Homes, a home builder in the region for many years, has announced plans to further expand into the Pittsburgh market.
San Jose, CA
San Jose homebuyers can expect to spend less money this month on housing, with monthly costs at around $7,508, a 2.38% drop in the share of income needed to be allocated to homeownership costs since last month. However, this may be a byproduct of many Bay Area tech companies’ return to work orders for employees with higher salaries. It is yet to be determined whether or not this will impact listing prices and, in turn, affordability.
Virginia Beach, VA
Virginia Beach fell five spots to the 82nd least affordable market, with a median list price of $389,000 and households spending 26.34% of income on housing. Affordability, however, may soon tighten as companies and major employers plan to expand operations to the city.
Methodology
The RealtyHop Housing Affordability Index analyzes proprietary and ACS Census data to provide an index of housing affordability and homeownership burden across the 100 most populous cities in the country. Median home prices are calculated using over 800,000 listings in the RealtyHop database over the month before publication.
To calculate the index, the following statistics are used:
1) Projected median household income based on Census ACS and BEA data
2) Median for-sale home listing prices via RealtyHop data
3) Local property taxes via ACS Census data
4) Mortgage expenses, assuming a 30-year mortgage, a 6.30% mortgage interest rate based on reported weekly averages in the past four weeks, and a 20% down payment.
See below for previous RealtyHop Housing Affordability Studies:
