RealtyHop Housing Affordability Index: January 2023

In this January edition of the RealtyHop 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?

Given a standard mortgage, median home prices, and average household incomes, homeowners in 68 cities across the country need to spend over 30% of their income to own a home this January. However, good news is potentially on the horizon; existing homes are staying on the market for longer periods of time, indicating a better outlook for buyers in 2023.

The 5 Least Affordable Housing Markets

1. Miami, FL

Miami is the least affordable housing market in the country again this January, becoming slightly more affordable. A family earning the median city income will still need to spend 85% of their paycheck on housing costs, compared to 85.67% last month.

2. Los Angeles, CA

For the seventh month in a row, Los Angeles is the second least affordable housing market. A household earning an average income of $71,466 would need to allocate a staggering 81.94% of their annual paycheck towards owning a home.

3. Newark, NJ

Newark was the third least affordable city this month, increasing one spot and swapping rankings with New York City. The median home price in Newark jumped by $5,000 to $385,000 in the period.

4. New York, NY

New York City dropped to fourth place this month, with median home prices sliding from $885,750 to $860,000. A household making $70,118 per year would need to spend 74.50% of their income in order to own a home, or roughly $4,353 per month. New York City and Newark’s swap is the first shift in our Least 5 Affordable rankings since July 2022.

5. Hialeah, FL

Hialeah remains fifth on our least affordable ranking this month. A household making the average income of $41,500 would need to spend 66.61% of its pay in order to buy a home in the city.

The 5 Most Affordable Housing Markets

1. Wichita, KS

For the fifth month in a row, Wichita ranks as the most affordable city in the country, despite home prices increasing to $150,000. A household earning the average income of $61,245 would only need to spend 16.54% of its income annually to own a home.

2. Fort Wayne, IN

Fort Wayne is the second most affordable city this month, with home prices dropping from $165,000 to $160,000. The average family in Fort Wayne only needs to spend 17.49% of its paycheck towards the costs of owning a home.

3. Detroit, MI

Detroit is the third most affordable U.S. housing market, with property becoming even more affordable this month. A family earning the median salary of $35,528 only needs to spend 17.67% of their income in order to own a home in the city.

4. Cleveland, OH

Cleveland held on to fourth place this January, as median home prices decreased from $115,000 to $109,450. Households earning the median income of $36,229 only need to spend 21.30% of their paycheck annually in order to own a property.

5. Lubbock, TX

For the second month, Lubbock ranks as the fifth most affordable U.S. housing market. The median asking price for a home decreased from $185,000 to $180,000. Households that make a median income of $60,045 only need to spend 21.74% of their earnings on housing costs.

Notable Change this Month

Louisville, KY

Louisville became less affordable this month, as home prices jumped from $235,000 to $250,000. While housing prices are still relatively cheap compared to the rest of the country, an average household in the city must now allocate 25.10% of its pay toward homeownership costs.

Winston-Salem

Winston-Salem jumped seven spots in our rankings to the 63rd least affordable housing market. The median purchase price for a home dropped from $259,990 to $257,190 in the month.

Phoenix, AZ

Phoenix decreased seven spots this month to 33rd place. Median home prices dropped from $449,000 to $435,000. In Phoenix, a family with an average income of $67,584 must allocate 39.22% of their income towards mortgage and property tax payments.

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