In this February 2025 edition of the Housing Affordability Index, we examine what American households across the 100 largest cities need to spend on housing to find out:
Is homeownership affordable or possible for the average American family?
The start of the year remains tricky for prospective buyers, who still face high housing costs and interest rates. At the moment, the 30-year fixed mortgage rate still sits at nearly 7%, forcing households to consistently evaluate their budgets. Most buyers can expect to spend at least 30% of their monthly income on their mortgage payments and property taxes. In larger cities nationwide, they’ll need to spend even more than 30%. Buyers looking to purchase property in February 2025 should consult an expert in their area to understand their local market.
Key Findings
- Homebuyers in 80 out of the 100 major cities we analyzed would have to spend over 30% of their annual income on homeownership – that’s two less than last month.
- In the 25 most unaffordable housing markets nationwide, homeowners spend at least 45% of their income on homeownership costs.
- California remains unaffordable for average Americans. Six of the ten least affordable markets are in California.
- One of the five least affordable housing markets — Newark, NJ — became less affordable this month. As sellers gear up for the spring buying season, prices will likely increase in the coming months.
- The median home price increased in one of the most affordable housing markets: Toledo, OH.
The 5 Least Affordable Housing Markets
1. Los Angeles, CA
Los Angeles is still the country’s least affordable housing market. The median list price slightly decreased to $1,133,000 this month, but homeowners can expect to direct a significant 96.18% of their income toward housing costs.
2. Irvine, CA
Irvine also held onto its position this month. Households with a median income of $132,401 can expect to spend $6,581.20 monthly on their mortgage payments and property taxes. That’s 87.50% of their income.
3. Miami, FL
Miami remains the third least affordable housing market. With a median list price of $699,000, households will direct 85.98% of their monthly income toward mortgage payments and property taxes.
4. New York, NY
New York City is still the fourth least affordable housing market this month. The median list price decreased to $840,000, and households with a median income of $82,497 will allocate 71.20% of it monthly to the cost of homeownership.
5. Newark, NJ
Newark held onto its spot as the fifth least affordable housing market. This city witnessed the largest price increase of all 100 cities this month. The median list price jumped 6.25% to $425,000, meaning households can expect to spend $2,922.60 on monthly housing costs.
The 5 Most Affordable Housing Markets
1. Detroit, MI
Detroit is, again, the most affordable housing market nationwide. The median list price decreased to $96,000 this month, and households can expect to spend $622.29 monthly on housing. That’s 18.36% of their income.
2. Toledo, OH
Toledo held onto its spot as the second most affordable housing market. Households with a median income of $48,896 can expect to spend $804.39 monthly on their mortgage payments and property taxes.
3. St. Louis, MO
St. Louis moved three spots to become the third most affordable housing market this month. The median list price dropped 4.61% to $205,000, and households can expect to spend 26.38% of their income on housing costs.
4. Cleveland, OH
Cleveland remained the fourth most affordable housing market. Households with a median income of $40,137 can expect to spend $891.50 monthly on their mortgage payments and property taxes.
5. Buffalo, NY
Buffalo is still the fifth most affordable housing market. The median list price decreased to $179,900, and households will now need to spend 26.89% of their income on the cost of homeownership.
Housing Markets to Watch
The following housing markets witnessed significant changes this month.
Richmond, VA
Richmond dropped eight spots in the rankings to become the 29th least affordable housing market this month. The median list price decreased by 4.82% to $395,000, and households now allocate 44.44% of their income to housing.
Omaha, NE
Omaha became more expensive for prospective buyers this month, becoming the 79th least affordable market. The median list price slightly increased to $289,900, and households can expect to direct 30.64% of their income to housing, almost the exact guideline of 30%.
Raleigh, NC
Raleigh buyers may find more buying opportunities this month in their budgets. The median list price dropped 5.35% to $425,000, and the city dropped six spots in the rankings to become the 59th least affordable market.
Methodology
The RealtyHop Housing Affordability Index: February 2025 analyzes 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 800,000 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, a 6.9175% mortgage interest rate based on reported weekly averages in the past four weeks, and a 20% down payment.
See below for previous RealtyHop Housing Affordability Studies:
- RealtyHop Housing Affordability Index: January 2025
- RealtyHop Housing Affordability Index: December 2024
- RealtyHop Housing Affordability Index: November 2024
