In this November 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?
Homeownership remains expensive for most prospective buyers nationwide. While home prices decreased across a majority of cities this month, the overall cost of owning a home is still unreachable for many households. As the Fed continues to cut interest rates, mortgage interest rates still sit near 7%. Those looking to buy a home will likely not see prices or interest rates drastically cool in the near future.
Key Findings
- Homebuyers in 82 out of the 100 major cities we analyzed would have to spend over 30% of their annual income on homeownership.
- In the 25 most unaffordable housing markets nationwide, homeowners spend at least 45.53% of their income on homeownership costs.
- California remains unaffordable for average Americans. Six of the ten least affordable markets are in California.
- One of the five least affordable housing markets — New York, NY — became less affordable this month.
- The median home price increased in one of the most affordable housing markets: Buffalo, NY.
The 5 Least Affordable Housing Markets
1. Los Angeles, CA
Los Angeles is still the country’s least affordable housing market. The median list price is $1,150,000, and households with a median income can now expect to spend a whopping 96.52% of their income on housing.
2. Irvine, CA
Irvine held onto its spot as the second least affordable market this month. Households with a median income of $129,568 can expect to spend $9,956.92 monthly on mortgage payments and property taxes.
3. Miami, FL
Miami remains the third least affordable housing market. With a median list price of $695,000, households will direct 84.63% of their monthly income toward the cost of owning a home.
4. New York, NY
New York City is still the fourth least affordable housing market. The median list price increased to $869,000, and families can expect to spend $4,899.29 on their monthly mortgage payments and property taxes.
5. Anaheim, CA
Anaheim made its way onto the list this month, becoming the fifth least affordable housing market nationwide. Households with a median income of $93,305 will spend 66.23% on their monthly homeownership costs.
The 5 Most Affordable Housing Markets
1. Detroit, MI
Detroit remains the most affordable housing market this month. With a median list price of $99,000, households with a median income can expect to direct $623.02 monthly toward homeownership costs.
2. Toledo, OH
Toledo held onto its spot as the second most affordable housing market. The median list price slightly increased to $122,950, and households can expect to direct 20.09% of their income toward mortgage payments and property taxes.
3. Buffalo, NY
Buffalo became the third most affordable housing market this month. Households with a median income of $48,671 will have to direct 26.64% of it toward the monthly cost of housing.
4. St. Louis, MO
St. Louis also entered the rankings, becoming the fourth most affordable housing market. The median list price in this city is $215,000, and households will spend $1,273.64 on their mortgage payments and property taxes.
5. Cleveland, OH
Cleveland remains the fifth most affordable housing market list this month. The median list price slightly increased to $140,000. Now, households with a median income can expect to spend $898.06/month on their mortgage payments and property taxes.
Housing Markets to Watch
The following housing markets witnessed significant changes this month.
Arlington, VA
Arlington moved six spots in the rankings to become the 61st least affordable housing market this month. The median list price jumped to $749,000, and households must now spend 36% of their monthly income on housing costs.
Stockton, CA
Stockton became more affordable for prospective buyers this month. The median list price decreased to $458,444, and households with a median income of $75,468 will now spend 41.72% of it on the costs of homeownership.
Richmond, VA
Richmond also moved up six spots in the rankings this month, becoming the 21st least affordable housing market. The median list price increased by 4.85%, and homeowners must spend $2,444.56 monthly on their mortgage payments and property taxes.
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 prior to publication.
To calculate the index, the following statistics are used:
1) Projected median household income
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 6.562% 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:
- RealtyHop Housing Affordability Index: September 2022
- RealtyHop Housing Affordability Index: August 2022
- RealtyHop Housing Affordability Index: July 2022
