In this January 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 January, with home prices remaining relatively stable at $906,000. Given standard household income of $54,501, an average family in LA needs to spend a staggering 92.11% of total annual income in order to own a home.
2. Miami, FL was the second most expensive market in the country. The city saw its affordability index increase again this month, up 0.2% due to a slight hike in home prices. An average household in Miami would need to spend $2,439 per month on housing costs, or 86.1% of total annual income.
3. New York, NY placed third on our list with an affordability index of 85.31%. Given home prices at a median of $900,000, the average family in NYC would need to allocate $4,107 per month toward homeownership costs.
4. San Francisco, CA continues to command the most expensive housing of any city on our list at a median of $1.448 million. Despite high incomes of $96,265, expensive real estate requires that the average family allocate $6,600 per month in order to own a home, or 82.28% of annual income.
5. Jersey City, NJ closed out our top five most expensive markets, placing fifth for the second month in a row. Given median home prices of $627,000, and household income of $62,739, an average household in Jersey City would need to allocate 66.6% of total annual income in order to own a home.
The 5 Most Affordable Housing Markets
1. Detroit, MI held steady as the most affordable city for homeowners this January. Detroit’s index decreased 1.57% over the past month, led by a drop in home prices to $50,000. The average household in the city only needs to allocate 13.04% of annual income in order to own a home.
2. Wichita, KS was the second most affordable market for homeowners. Relatively low home prices at $130,000, coupled with household income of $49,000, equates to a family only needing to spend 16.4% of annual income in order to own a home.
3. Fort Wayne, IN dropped from the second to third most affordable market. Given median incomes and home prices, a family in the city would only need to spend $627 per month on mortgage and tax costs. This equates to a low 16.43% affordability index.
4. Cleveland, OH became more affordable this month, seeing a 2.36% drop in its index. With median home prices remaining low at $82,900, the average household in the city can own a home for only $450 per month, or 19.39% of annual income.
5. Kansas City, MO saw a dip in home prices over month, leading to a 2.48% drop in homeownership burden. The city is particularly attractive for its relatively strong household incomes and low real estate prices. A Kansas City family can own a home for only $898 per month, or 21.5% of total annual income.
Notable Changes This January
- Washington, DC jumped three spots to 20th place on our list, as the city saw its affordability index increase 1.62%. A household in DC should expect to allocate 43.49% of annual income toward mortgage and tax costs.
- Madison, WI increased four spots to 42nd place this month. With median home prices at $287,500 and annual household income at $59,387, a family in Madison should expect to pay 33.88% of income toward homeownership costs, assuming standard mortgage and tax rates.
- Pittsburgh, PA saw its affordability index increase 4.93% due to a hike in median home prices to $215,000. The city now ranks 53rd on our list.
- San Antonio, TX became more affordable in the month, dropping eight spots to 66th place. A household in the city should expect to pay $1,180 per month to own a home, or 28.5% of total annual income.
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:
- RealtyHop Housing Affordability Index: December 2019
- RealtyHop Housing Affordability Index: November 2019
- RealtyHop Housing Affordability Index: October 2019