RealtyHop Housing Affordability Index: May 2019

Posted April 30th, 2019

 

In this May 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 most cost burdened city in the country for homeowners this May. A slight increase in median home prices to $879,950 exacerbated the issue, with the average household requiring 89.5% of their monthly income to own a home. This amounted to an increase of 0.57% compared with April.

2. New York City, NY jumped one spot this month to become the 2nd most cost burdened city for homeowners. The average household in the city would require 86.3% of their monthly income toward costs related to homeownership, an increase of 2.25% compared with April.

3. Miami, FL dropped one spot to 3rd on our list, despite remaining flat in terms of homeownership burden. A median home sales price of $500k compared with annual household income of just $34k means that owning a home in Miami remains incredibly difficult.

4. San Francisco, CA remained the 4th least affordable housing market in the country this May. A drop in home prices did lead to homeownership burden decreasing 1.19% compared with last month, however. The average family should expect to set aside 71.03% of monthly income toward the costs of owning a home.

5. Oakland, CA remained the 5th least affordable housing market, seeing a 3.72% increase in homeownership burden over the past month. The average residents will need to allocate 66% of total monthly income if they decide to purchase a home.

 

The 5 Most Affordable Housing Markets

 

1. Detroit, MI was again the most affordable city in America for homeowners this May, despite a slight increase in home prices. The median household should expect to allocate $296 per month toward mortgage and tax costs, representing only 12.78% of total monthly income.

2. Fort Wayne, IN was 2nd most affordable housing city this May, as the average household would need to only spend 15.18% of income toward homeownership costs. The median home sales price in the city is currently an affordable $120,000.

3. Cleveland, OH moved up one spot on our list to become the 3rd most affordable housing market this May. The average homeownership burden dropped 1.96% in the month to 17.54%.

4. Wichita, KS fell one spot to 4th on our most affordable cities list. The median home price this May was $139,900, while average household income was a solid $48,982. The city’s homeownership burden increased a slight 0.65% due to a hike in home sales prices.

5. Indianapolis, IN displaced Buffalo, NY to become the 5th most affordable housing market in the country. The average household would only need to allocate $747.15 per month toward owning a home, or 20% of total monthly household income.

 

Notable Changes This May

 

  • Austin, TX entered the top 25 least affordable homeownership markets for the first time this May. The city saw a 2.67% increase in costs associated with homeownership, with the average household requiring 39.39% of their income to afford housing each month.
  • Pittsburgh, PA jumped 11 spots on our list to 54th place. An increase in home sales prices contributed to the city’s share of income for homeownership increasing 8.11%. The median household would need to allocate $1,100, or 29.9% of monthly income, toward mortgage and tax costs.
  • Colorado Springs, CO dropped 11 spots to 63rd place. The city boasts affordable housing, with families only requiring 28.2% of income to own a home.

 

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.

 

Full Dataset