In this March 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 America again this March. Despite strong household income of $62,142, real estate prices made owning a home a far reach for most residents. Given current mortgage and tax rates, a family in LA would need to spend 84.71% of annual income in order to afford a home.
2. Miami, FL
Miami, FL remained the second least affordable city for homeowners. In fact, the average household in Miami would need to spend $2,513 per month, or 77% of annual income, on the costs associated with homeownership.
3. New York, NY
New York, NY despite strong household income of $64,000, continued to be an unaffordable market. Median real estate values hit $900,000 this March, leading to an average mortgage and tax payment of $4,116 — or 77.17% of an NYC family’s annual income.
4. Newark, NJ
Newark, NJ was the fourth most burdened city for homeowners, as the city’s index increased another 1.56%. Given household income, mortgage, and tax rates, an average family in Newark would need to spend 67.38% of income on housing costs. This equated to $1,976 per month in dollar terms.
5. San Francisco, CA
San Francisco, CA was the fifth most unaffordable housing market. While income remains strong at $112,449 per household, high real estate prices put a squeeze on most families. An average family in SF would need to spend $6,077 per month, or 64.85% of income, in order to own a home.
The 5 Most Affordable Housing Markets
1. Detroit, MI
Detroit, MI was again the most affordable city for homebuyers, despite an increase in property prices over the period. A family looking to buy a home would need to only spend 14.85% of their income on housing costs, or roughly $382 per month.
2. Fort Wayne, IN
Fort Wayne, IN came in as the second most affordable market this month. Given strong household income of $49,411 relative to home prices, a family would only need to spend 16.75% of annual income on homeownership costs each year.
3. Witchita, KS
Witchita, KS was stable as the third most affordable city this March. A local household would only need to spend $768 per month on housing costs, given affordable real estate prices relative to incomes.
4. Anchorage, AK
Anchorage, AK remained affordable with a median property price of $277,500, and household income of $84,928. Given the current market, a family in Anchorage would only need to spend 20% of their income in order to own a home locally.
5. Cleveland, OH
Cleveland, OH was stable as the fifth most affordable city. Household income was $30,907 alongside home prices of $99,900. Given current rates, a family in Cleveland would only need to spend 20.89% of income towards the costs of owning a home.
Notable Changes This March
Boise experienced a hike in property prices from $379,900 to $399,000, leading to a 5.03% increase in its index. A household in Boise should expect to spend roughly 38% of income on housing costs if they plan to purchase a home.
Tucson saw home prices rise from $220,000 to $229,700 over the period, leading to an eight spot jump on our rankings. An average family in Tucson spends $1,104, or 30.51% of their paycheck, on homeownership costs every month.
Charlotte dropped five spots on our list, as the city became more affordable in the period. Home prices decreased from $362,900 to $354,750, leading to a 2.25% drop in the city’s affordability index.
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: