Housing has become increasingly unaffordable in the United States. In this April edition of RealtyHop’s Housing Affordability Index, we examined the share of homeownership cost to income to find out:
Is homeownership affordable or possible for the average American family?
This month, the five least affordable and five most affordable housing markets remain the same. 71 cities, however, experienced month-over-month appreciations. This indicates that housing in major U.S. cities is increasingly unaffordable, although the recent and upcoming rate hikes could finally cool down the housing market.
The 5 Least Affordable Housing Markets
1. Miami, FL
For the third month in a row, Miami is the least affordable housing market in the entire nation. This month, the median list price reached $619,000, driven by strong demand from investors and homebuyers alike. Based on the projected median household income of $44,095, an average Miami family would have to set aside 81.42% of their annual income for homeownership costs. This number is 1.71% higher than in March.
2. New York, NY
This April, New York City remains the second least affordable city in the U.S. The median asking price hit $981,900, up 1.1% from the previous report. A typical family in the city can expect to spend 78.07% of their annual income on mortgage payments and property taxes.
3. Los Angeles, CA
Los Angeles continues to rank the third least affordable U.S. city this month. With a median asking price of $944,000 and a projected median household income of $68,767, an average L.A. should allocate 75.69% of their annual income toward monthly mortgage payments and property taxes, up 0.91% from the previous month.
4. Newark, NJ
Newark is once again the fourth least affordable housing market in the nation. Median real estate values for residential properties hit $402,000 this past month. After factoring in mortgage payments, property taxes, and median household income, a typical Newark household will need to contribute 75.64% of their income toward homeownership costs. The share of income for homeownership is 1.92% higher than last month.
5. Jersey City, NJ
Jersey City again rounded up our five most unaffordable cities this April, despite a small dip in median home value. With a median list price of $691,950, a family making a median household income in Jersey City will need to spend 58.58% of their annual income on mortgage repayments and property taxes, down 1.49% from the previous month.
The 5 Most Affordable Housing Markets
1. Wichita, KS
Wichita once again ranks the most affordable housing market in the country, even though home values increased 4.37% this month. Given a projected median household income of $59,239 and a median list price of $153,950, an average Wichita family will need to allocate 16.03% of their annual income toward homeownership.
2. Fort Wayne, IN
Fort Wayne remains the second most affordable U.S. city this April, despite a jump in housing costs. The median home value reached $160,000 this month, up 5.26% month-over-month. For a family making median household income in Fort Wayne, owning a home means setting aside 16.33% of their annual income for monthly mortgage payments and property taxes.
3. Detroit, MI
Detroit continues to be one of the most affordable cities in the country. The city ranks the third most affordable housing market this month, with a median asking price of $85,000. A family making median household income in Detroit should budget 16.41% of their annual income for monthly mortgage payments and property taxes, which comes out to around $472 per month.
4. Lubbock, TX
Lubbock improved one spot on our rankings and became more affordable this month. It is now the fourth most affordable U.S. city, with a median list price of $159,900. An average household looking to purchase a home in Lubbock will need to allocate 18.69% of their annual income toward homeownership costs.
5. Cleveland, OH
Cleveland became the fifth least affordable housing market in the nation. This April, the median home price reached $109,900, up 2.71% month-over-month. With a projected median household income of $34,861, a typical Cleveland family would have to spend 20.38% of their annual income on homeownership costs. This number is 1.79% higher than in February.
Notable Changes this April
Phoenix has become increasingly popular in recent years, and this month, housing affordability worsened in the city. The city rose six spots in our affordability rankings and is now the 31st least affordable U.S. housing market. With a projected median income of $65,034 and a median asking price of $445,995, a typical Phoenix family will need to contribute 37.77% of their annual income to homeownership costs, up 3.41% from the previous month.
Mesa became more affordable this month, thanks to a slight decrease in home prices. The city ranks the 38th least affordable city in the nation, down seven spots from the previous month. The median list price currently sits at $429,000, 2.49% lower than in March. With a projected median household income of $65,851, families looking to own in Mesa should set aside 35.66% of their annual income for mortgage payments and property taxes.
Housing affordability in Raleigh improved this April. The city now ranks 61st on our affordability rankings. With a median list price of $400,000 and a projected median household income of $77,575, a family planning to buy soon can expect to spend just under 30% of their annual income on homeownership costs.
The RealtyHop Housing Affordability Index analyzes both 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 300,000 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
Our affordability index methodology was adjusted in January 2022. Due to the COVID-19 pandemic and data collection issues experienced by the 2020 ACS, no income data has been released since 2019. To ensure that our affordability index properly reflects the incomes of American households, we projected out median household incomes based on income growth statistics released by the Bureau of Economic Analysis. This provides a realistic estimate of what Americans are currently making per household.
See below for previous RealtyHop Housing Affordability Studies:
- RealtyHop Housing Affordability Index: March 2022
- RealtyHop Housing Affordability Index: February 2022
- RealtyHop Housing Affordability Index: January 2022