In this April 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?
Despite high-interest rates and declining real estate prices, homebuyers nationwide continue to grapple with housing affordability. As many markets ramp up in anticipation of the busy spring and summer seasons, buyers are deciding whether this is the year to purchase a property.
- Homeowners in 67 major cities must spend over 30% of their annual income on the cost of homeownership; that’s one city less than last month.
- In the 25 most unaffordable housing markets nationwide, homeowners direct over 40% of their income toward homeownership.
- The median purchase price for a home in the top four unaffordable housing markets has decreased or stayed the same since January 2023.
The 5 Least Affordable Housing Markets
1. Miami, FL
Miami is the least affordable housing market this April. The median purchase price for a home increased to $589,000, and potential buyers must now anticipate spending 80.46% of their monthly income on the cost of homeownership. Prospective buyers continue to face an unaffordable climate, despite declining asking prices.
2. Los Angeles, CA
Los Angeles remains the second most unaffordable housing market in the nation. Prospective buyers earning a median household income of $73,432 should expect to spend $4,743 per month on mortgage and property tax payments.
While median asking prices for a home have decreased, buyers remain priced out of the market. Low inventory has also made finding a suitable home even more difficult.
3. Newark, NJ
Newark ranks as the third least affordable housing market this April, despite the median listing price of a home dropping slightly to $385,000.
With more properties on the market and slightly lower asking prices, there are thankfully more opportunities for Newark buyers to secure a home currently. As the city’s population also increases, new real estate investments will help maintain a healthy housing market.
4. New York, NY
New York City has the fourth least affordable housing market in the country, where buyers generating a median household income of $71,556 must spend $4,082 every month in order to own a home.
5. Oakland, CA
Oakland bumped Hialeah off of our most unaffordable list, taking fifth place. The median list price for a home in Oakland is $899,999 this April, meaning the average family would need to spend 65.5% of their income on mortgage payments and property taxes.
Between tech layoffs, low inventory, and less appeal than during the “Zoomtown” influx of at-home work, fewer buyers and sellers are participating in the Oakland real estate market. Fewer prospective buyers leave sellers wondering if now is the time to list their property, decreasing the available inventory.
The 5 Most Affordable Housing Markets
1. Detroit, MI
Detroit ranks as the most affordable housing market this month. The median purchase price for a home decreased to $80,000, meaning families only need to spend 16.43% of their annual income in order to own a home.
2. Wichita, KS
Wichita is the second most affordable housing market nationwide. Potential buyers generating a median income of $62,057 will spend $981.00 on mortgage payments and property taxes.
Wichita continues to try and increase its inventory levels to meet buyer demand. With plans for new high-end duplex development on the way, buyers can hope to see more purchasing options in the future.
3. Cleveland, OH
Cleveland remains the third most affordable housing market. Those earning the median household income of $36,709 will need to only spend 21.49% of their income on housing costs.
Unlike the pricing vitality that Zoomtowns witness on the Western coast, midwestern cities like Cleveland have not witnessed significant price increases or decreases. In this city, asking prices remain consistent as the market shifts into the Spring season, maintaining opportunities for buyers who decide to enter the market.
4. St. Louis, MO
St. Louis is still the fourth most affordable housing market in April. The median purchase price for a home is $175,000, and buyers spend $945.20 monthly on maintaining a home.
More buyers are taking advantage of low asking prices and interest rates, and housing prices continue to drop throughout 2023. The median purchase price is down $40,000 since January, and buyers continue to hold more purchasing power than they did last year.
5. Fort Wayne, IN
Fort Wayne has the fifth most affordable housing market in the country, and the city become more affordable for buyers this month. The median purchase price for a home decreased to $207,500, and owners spend 22.08% of their income on mortgage payments.
Those who decide to participate in the Fort Wayne housing market must still combat high-interest rates and levels of competition. With low inventory, potential buyers work against other intrigued buyers who look to claim a piece of available inventory.
Coastal Housing Markets
Hybrid work models have become more common after COVID-19, impacting markets nationwide. Cities on the West Coast are watching housing prices decrease while those on the East continue to climb. Layoffs in the technology sector, combined with the Silicon Valley Bank collapse, have weakened the economies of tech-dependent cities. Cities that watched their housing prices increase during the pandemic are now correcting to match market conditions.
West Coast Cities
Seattle housing costs decreased this month, where the median purchase price for a home dropped to $740,000. While the city ranks as the 23rd least affordable housing market, buyers in this region now only spend 41.56% of their income on housing costs.
With tech layoffs and fewer remote working opportunities, the demand for housing has slowed throughout the city. Furthermore, those who lost their high-paying positions may have to sell their homes and move to more affordable areas while looking for new employment opportunities. Those selling their homes must lower their asking prices to appeal to the few buyers looking to purchase properties.
San Diego, CA
San Diego also grew more affordable for homebuyers. The median purchase price decreased to $875,000, and homeowners spend $4,514.23 monthly on mortgage payments and property taxes.
San Diego properties appealed to remote workers who opted for sunnier working conditions throughout the pandemic. As more employers require in-person employees, fewer buyers flock to the area to purchase properties. Supply continues to increase steadily throughout the city, encouraging sellers to price their property competitively to ensure it stands out.
East Coast Cities
Atlanta jumped five spots in our rankings this month, becoming the 40th least affordable housing market nationwide. The median purchase price for a home increased to $399,900, and homeowners can now expect to spend 36.66% of their income on housing costs.
Atlanta continues to witness consistent job growth, and the city continues working to build more housing and meet the demand. While inventory is increasing year over year, a boom in the local economy and population means sellers may still receive multiple offers on a property, leaving them with the power to up their asking price.
Jacksonville also became more unaffordable this month, where the median housing price increased to $304,900. Homeowners with a median income of $66,110 spend $1,617.15 monthly on homeownership.
The northeastern part of Florida continues to host a growing housing market, where more transactions at higher price points propel the industry forward. While the city also struggles to keep up with housing demand, those who decide to put their house on the market can charge a higher asking price.
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 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
4) Mortgage expenses, assuming a 30-year mortgage, 5.5% interest rate, and 20% down payment.
To better reflect the current housing market for the general America homebuyers, we have updated our methodology to include only the following property types: single-family homes, module homes, condos, co-ops, and townhouses. You may therefore see discrepancies between prior reports based on this change.
See below for previous RealtyHop Housing Affordability Studies:
- RealtyHop Housing Affordability Index: March 2023
- RealtyHop Housing Affordability Index: February 2023
- RealtyHop Housing Affordability Index: January 2023