RealtyHop Housing Affordability Index: December 2019

Posted November 25th, 2019

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 was the least affordable city for homeowners this December. The city saw its index increase due to a jump in median home prices to $905,000. The average family in LA should expect to allocate a staggering 92% of yearly household income in order to own a home.

2. Miami, FL came in as the second most cost burdened housing market in the country, leaping ahead of New York City for the first time on our ranking. The average household in the city would need to spend a considerable $2,434 per month on housing costs. Miami’s homeownership burden increased 1.86% over the month to 85.93%.

3. New York, NY was third on our ranking, dropping below Miami. Despite a small decline in home prices, New Yorkers should still expect to pay over $4,103 per month given standard mortgage and tax rates. This equates to 85.2% of annual household income.

4. San Francisco, CA saw home prices increase again this month to a median of $1.425 million. A family in the city would need to spend over $6,495 per month in order to own a home, given standard mortgage and local tax rates, or 80.97% of annual household income.

5. Jersey City, NJ makes its first appearance in our top five least affordable list this month, as its homeownership burden increased by 4.83% to 66.81%. Given a median home price of $629,000, and annual household income of $62,739, the average household would need to pay $3,493 per month in homeownership costs.

 

The 5 Most Affordable Housing Markets

 

1. Detroit, MI was the most affordable city for homeowners this December, despite a 1.8% increase in our index. A household in the city would only need to spend 13.24% of annual income to own a home, given standard mortgage and local tax rates.

2. Fort Wayne, IN remained the second most affordable city in the country this month, as home prices dropped from $134,900 to $130,000 in the period. Given median household income of $45,853, residents would only need to spend 16.44% of annual pay to own a home in the city.

3. Wichita, KS became more affordable in the month, seeing a 3.57% drop in its homeownership burden. The average household in Wichita would only need to spend $694 per month in mortgage and tax costs to own a home.

4. Cleveland, OH placed fourth this December, as home prices remained flat over the month. Given mortgage and tax rates, the average household would only need to spend $460.93 per month, or 19.9% of annual household income, to own a home.

5. Bakersfield, CA was again a solid choice for those looking for affordable housing. Despite a bump in home prices to $215,000, strong household incomes helped to make Bakersfield affordable. A household in the city would only need to spend $1069 per month, or 21.4% of annual income to own a home.

 

Notable Changes This December

 

  • Arlington, VA increased five spots to 45th place on our list as home prices increased to $650,000. The average family in the city would need to allocate 33.1% of annual income toward homeownership costs, an increase of 3.19% since last month.
  • Fresno, CA dropped four spots to 40th place. Given a home price of $269,900, the average household in the city should expect to pay $1,296.36 per month in homeownership costs. This equates to 34.68% of total annual income.
  • Scottsdale, AZ jumped four spots to take 26th place this December. The city’s homeownership index increased 3.11% in the period due to a bump in home prices to $597,000.
  • Birmingham, AL was the 36th most expensive city for homeowners this month, a drop of three spots since November. Resident households should expect to allocate 35.84% of annual household income toward standard mortgage and local tax rates.

 

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