RealtyHop Housing Affordability Index: August 2019

Posted July 29th, 2019

In this August 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 was again the least affordable housing market in the country, experiencing a 0.53% increase in homeownership burden. In order to own an average home in LA, a local family would have to spend $4,173 per month to cover standard mortgage and tax costs.

2. Miami, FL remained second place on our list, despite becoming more affordable over the month. Median home prices dipped under $500,000, leading to a 1.96% decrease in our burden index.

3. New York, NY was third place this August, with households requiring 84.83% of total annual income to be able to afford a standard home. This represented a 0.54% drop in our index when compared with July’s figure.

4. San Francisco, CA continued its upward trajectory, as home prices continued to increase over the month. Median asking prices in the city reached $1,327,000. Given this, mortgage and taxes for an average family would equate to $6,050 per month, or 75.4% of median household income.

5. Oakland, CA was again fifth place on our list, coming just behind its Bay Area counterpart. Oakland’s homeownership burden was 66%, meaning that the average family would need to spend about two thirds of total annual income to be able to own a home. This constituted an improvement of 3.07% compared with last month in terms of affordability.

 

The 5 Most Affordable Housing Markets

 

1. Detroit, MI remained the most affordable housing market in the country, as home prices in August remained unchanged. The average family in Detroit would only need to allocate 13% of annual household income toward homeownership costs.

2. Fort Wayne, IN remained the second most affordable housing market in the nation this August. The average family would only need to allocate $652 per month to cover a mortgage and local taxes, or only 17.08% of total annual income.

3. Wichita, KS saw its homeownership burden drop 3.52% in the month, driven by a decrease in home prices to a median of $139,900. A household in the city should expect to allocate 17.65% of total annual income toward homeownership costs.

4. Cleveland, OH was the fourth most affordable city on our list this August. That being said, median home prices continued to rise; up to $84,500, an increase from $81,000 in July. The city still does offer a very affordable option for would-be homebuyers.

5. Indianapolis, IN saw a modest 1.82% increase in homeownership burden over the month, as home prices increased to $168,000. Mortgage and tax costs for the average local family comes out to an affordable $820 per month.

 

Notable Changes This August

 

  • Birmingham, AL jumped five spots to 43rd place on our list, as median home prices increased to $210,000. Given local mortgage and tax rates, the average family would have to shell out about one third of total annual income to be able to afford a home.
  • Cincinnati, OH ccame in at 63rd place, becoming more affordable to a decrease in median home prices to $162,600. The average family would only need to allocate 29.1% of annual income toward the costs of homeownership.
  • Milwuakee, WI dropped five spots to 77th place on our list. The city’s homeownership burden also dipped 3.52% in the month to 26.96%, making it still a top affordable option.
  • Corpus Christi, TX increased five spots to 61st place. Given home prices and local tax rates, the average family would need to allocate $1,304 per month toward homeownership costs. This equates to about $28.5% of annual household income in the city.

 

Methodology

 

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 the previous RealtyHop Housing Affordability Indexes:

Full Dataset