Market Trends & ResearchRealtyHop Housing Affordability Index: December 2022

RealtyHop Housing Affordability Index: December 2022

In the December edition of RealtyHop’s Housing Affordability Index, we examined the share of income U.S. households would have to spend on homeownership costs to find out:

Is homeownership affordable or possible for the average American family?

Exactly like last month, 57% of cities across the country became more affordable for homebuyers while 33% became less affordable and 10% remain unchanged. Homeowners in cities like Sacramento, Boise, Louisville, and Dallas can sigh relief as housing prices decrease.

Considering a 30-year fixed-rate mortgage with a 5.5% interest rate, median list price, and average household income, homeowners in 75 cities across the country spend more than 30% of their income on the cost of owning a home. As interest rates continue to climb, and housing sentiment decreases, many potential homebuyers continue to wonder whether they’ll ever be able to purchase a home.

 

The 5 Least Affordable Housing Markets

1. Miami, FL

Miami holds onto its spot as the city with the least affordable housing market in the country. The city continued to grow more expensive this month, as the median askingprice increased 0.50% from $595,000 to $598,000. A family making the average household income of $44,581 must now direct a sizeable 85.67% of their paycheck towards housing costs.

2. Los Angeles, CA

For the sixth month in a row, Los Angeles remains the second least affordable city. However, the median purchase price from a home decreased by $1,000 to $949,000, making housing slightlymore affordable than last month. Someone earning an average salary of $69,695 can expect to spend 83.06% of their income on housing costs like mortgage payments and taxes. As the city with the largest number of the most expensive zip codes across the country, residents can only hope that costs continue to decrease through the end of the year.

3. New York, NY

New York City anks as the third least affordable city in the U.S., where the median purchase price of a home increased 1.93% from $869,000 to $885,750. A resident with an average salary of $68,129 will have to spend 78.97% of their income on housing, equating to $4,483.45 monthly. However, the city remains less expensive than this summer, where homeowners directed 84.61% of their income toward housing costs.

4. Newark, NJ

Yet again, Newark ranks as the fourth least affordable city nationwide. Housing continued to grow more affordable for residents this month, as the median housing price dropped 1.97% from $380,000 to $372,500. In this city, the average resident generates a median salary of $38,854, meaning a homeowner with a 5.5% interest rate must spend 75.00% of their income towards homeownership costs.

5. Hialeah, FL

Hialeah is the fifth least affordable housing market. Out of our top five list, Hialeah witnessed the most drastic change this month as the median home price increased 2.43% from $449,000 to $459,900. A household who earns an average income of $40,036 must allocate 71.76% of their pay towards homeownership costs equating to $2,394.15 monthly.

 

The 5 Most Affordable Housing Markets

1. Wichita, KS

For the fourth month in a row, Wichita ranks as the most affordable city in the country. Wichita became even more affordable for residents this month, as the median asking price for a home decreased from $149,900 to $145,000. An average household earning $59,861 annually will now only need to spend 16.36% of their income on homeownership costs.

2. Fort Wayne, IN

Fort Wayne is the second most affordable city this month, with median home prices dropping 2.88% from $169,000 to $165,000. An average household in Fort Wayne makes a median income of $57,533, and needs to spend 18.30% of their income to own a home.

3. Detroit, MI

Detroit continues to rank as the third most affordable U.S. housing market. Out of the top five most affordable markets, Detroit experienced the most significant shift in affordability, with median asking prices decreasing 4.76% to $90,000. A family who earns an average salary of $34,932 only needs to allocate 19.03% of their income towards homeownership costs on a 30-year conventional mortgage.

4. Cleveland, OH

Cleveland moved up one slot and became the fourth most affordable housing market nationwide. The median purchase price of a home decreased by 3.36% from $119,000 to $115,000. Residents who earn a median salary of $35,305 can expect to direct 22.96% of their income towards homeownership costs, or $675.50 monthly.

5. Lubbock, TX

This month, Lubbock dropped to the fifth most affordable housing market nationwide. The median asking price for a home was steady at $185,000. Therefore, a resident earning an average income of $57,685 will still expect to spend 23.26% of their income on housing costs.

Notable Change this Month

Oakland, CA

Oakland saw the most significant shift towards unaffordability as median housing prices increased from $812,500 to $850,000. This shift moved the city up three spots in our ranking, where it’s now the 11th most unaffordable market nationwide.

Chandler, AZ

Residents of Chandler can take comfort in knowing that their city dropped seven spots this month and now sits as the 50th most expensive housing market. The median purchase price of a home decreased 4.54% from $549,950 to $525,000. A household with an average income of $94,420 can now allocate 33.81% of its income toward homeownership costs, or $2,660.28 monthly.

Orlando, FL

Orlando moved up eight spots on the list this month, now residing as the 70th most unaffordable housing market. The median asking price for a home increased by 3.64% from $357,000 to $370,000. In Orlando, a family making an average salary of $59,089 needs to spend 40.69% of their income on mortgage and property taxes.

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) 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.

See below for previous RealtyHop Housing Affordability Studies:

 

Full Data

Scroll to the right to view the full data set

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