In this December installment of the RealtyHop Housing Affordability Index, we investigate the decision to purchase a home in the 100 most populous cities across America. Is homeownership affordable or even possible for the average family in each city? Every month we analyze proprietary RealtyHop data alongside comprehensive U.S. Census data to find out. See how your city fares in affordability.
The 5 Least Affordable Housing Markets
1. Los Angeles, CA
Los Angeles, CA was the least affordable city in the country this December. Despite real estate prices dropping to $920,000, the city’s affordability index remained high. In fact, an average family in LA would need to allocate over 93.5% of annual income in order to afford a home in the city.
2. Miami, FL
Miami, FL remained the second least affordable market, due to inflated real estate relative to income. Given the city’s median home price of $525,000, an average family in Miami would need to spend $2,561, or 90.4% of income, toward the costs of owning a home every month.
3. New York, NY
New York, NY saw a small increase in its index this December, due to a hike in home prices from a median of $865,000 to $869,000. An NYC family looking to purchase a home in the city should expect to allocate 82.37% of their annual income toward mortgage and tax costs.
4. San Francisco, CA
San Francisco, CA remained stable at fourth place this December. With the current median home price of $1.395M, alongside household income of $96,265, an SF family would need to spend $6,359 per month in order to own a property.
5. Oakland, CA
Oakland, CA came in fifth place, despite a 2.14% slide in our index. Real estate listings in the city had a median price of $772,000 this December, a decrease from $788,900 last month.
The 5 Most Affordable Housing Markets
1. Detroit, MI
Detroit, MI was the most affordable market this December, despite becoming 5.6% more expensive for home buyers. Home prices rose to a median of $59,000, alongside household income of $27,838. Given this, a family in Detroit would only need to allocate 15.38% of income toward the costs associated with homeownership.
2. Fort Wayne, IN
Fort Wayne, IN remained the second most affordable city in the country for homebuyers this month. The average household in Fort Wayne would only need to spend $722 per month on housing costs, or roughly 18.91% of annual income.
3. Witchita, KS
Witchita, KS was the third most affordable housing market, led further by a drop in real estate prices. Given household income of $48,982, as well as local tax rates, a family in Wichita would only need to spend a reasonable 19.55% of income in order to own property.
4. Anchorage, AK
Anchorage, AK made its first appearance on our most affordable list, led by a drop in real estate prices to $299,000 from $319,000 last month. Families in the city should only expect to allocate 22.23% of income toward homeownership costs.
4. Indianapolis, IN
Indianapolis, IN became the fifth most affordable market for homebuyers, increasing one spot on our ranking. A household in the city would only need to spend 23.59% of annual income in order to own a local property.
Notable Changes This December
Philadelphia increased four spots to 39th place, as the city’s affordability index increased 1.96%. Assuming household income of $40,649, median real estate prices of $259,900, and local tax rates, a family in Philly would need to spend 37.32% of their income on housing costs.
Birmingham dropped eight spots to 42nd place, led by a considerable dip in real estate over the period. Median home prices came in at $230,000 this month, down from $249,900 in November.
Arlington, VA saw the largest fluctuation of any city in our rankings, down twelve spots to 65th place. The city became more affordable due to a drop in home prices from $650,000 to $609,950 over the month.
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) Median household income from the U.S. Census
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, 4.5% interest rate, and 20% down payment.
See below for previous RealtyHop Housing Affordability Studies:
RealtyHop Housing Affordability Index: November 2020