RealtyHop Housing Affordability Index: November 2019

Posted October 31st, 2019

In this November 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 remained the least affordable city for homeowners this November, requiring the median household to allocate 91.5% of yearly income towards owning a home. This equates to over $4,155 per month in mortgage and tax costs.

2. New York, NY experienced a slight drop in homeownership burden due to a dip in home sales prices. Despite this, the city remained ahead of Miami for the second month in a row. Given standard mortgage and local tax rates, average NYC households should expect to pay $4,107 per month, or 85.3% of annual income, in order to own their own place.

3. Miami, FL saw home prices remain stable this November at $489,900 for the average for-sale listing. Given median household income of $33,999, the average family should however expect to allocate a staggering 84.4% of annual income if they would like to own their residence.

4. San Francisco, CA was the fourth most cost burdened city for homeowners this November. Despite high median annual household incomes of $96,265, home prices remained stable at $1.398 million, requiring households to allocate 79.4% of annual income to afford a home in the city.

5. Boston, MA remained in our top five for the third month in a row, experiencing a 1.37% rise in our index due to a hike in home prices. Given standard mortgage and local tax rates, the average household should expect to allocate 66.6% of annual income toward the costs of owning a home.

 

The 5 Most Affordable Housing Markets

 

1. Detroit, MI was again the most affordable city for homeowners this November, as prices remained constant through the period. A household on average only needs to spend 13% of total annual income to own a home; considerably cheaper than the next most affordable market, Fort Wayne, IN at 17%.

2. Fort Wayne, IN retook the second most affordable spot, leaping Wichita, which briefly became even less expensive last month. Given a median household income of $45,853, and home listing prices of $134,900, residents should expect to allocate only 17% of income to own a home in the city.

3. Wichita, KS dropped one spot to the third most affordable city in the U.S. due to an increase in home prices. The city still remains a great option for those looking to purchase a home.

4. Cleveland, OH held fourth place this November, as home prices remained flat over the month. Given local mortgage and tax rates, the average household only needs to spend $460.93 per month, or 19.9% of annual household income, to own a home.

5. Bakersfield, CA rounds out our most affordable list, despite a 3.5% increase in its homeownership burden index this month. Resident households in the city only need to allocate 21.9% of annual income in order to own the average property.

 

Notable Changes This November

 

  • Newark, NJ saw a 3.51% increase in homeownership index this November. This was due to a jump in median home sales prices from $285,000 to $295,000 over the month. Despite this, the city remained in 8th place on our list.
  • Richmond, VA increased two spots to 28th place. Resident households can expect to allocate 40% of annual income toward the costs of owning a home.
  • New Orleans, LA dropped nine spots to 65th place, due to a much softer home sales market. Median home listing prices decreased to $198,000, leading to a 4.8% decrease in the costs associated with homeownership.
  • Sacramento, CA became increasingly affordable this November, dropping four spots to 37th place on our ranking. The city’s homeownership burden index decreased 3% due to a drop in median home prices.

 

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.

 

See below for the previous RealtyHop Housing Affordability Indexes:

Full Dataset