RealtyHop Housing Affordability Index: October 2019

Posted September 30th, 2019

In this October 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 October, remaining the only place with a homeownership burden above 90%. Given standard mortgage and local tax rates, the average family in L.A. would need to allocate 91.4% of their total annual income in order to own a home.

2. New York, NY displaced Miami as second place on our list, as the city experienced a jump in home sales prices. The average household in New York should expect to pay 85.8% of total annual income toward homeownership costs, equating to about $4,130 per month.

3. Miami, FL saw a 1.81% decrease in homeownership burden this October. Miami still remains expensive for homeowners, with the average family needing to spend 84.4% of annual income to own a standard home in the area.

4. San Francisco, CA home prices continued their meteoric rise, leading to a 1.67% increase in our index. Given a staggering median sales price of $1.398 million, a household would need to spend just under 80% of their high annual income to afford a home in the city, given mortgage and tax rates.

5. Boston, MA remained in our top five for the second month in a row, as prices remained constant over the period. A household would need to shell out about $3,400 a month, or 65.7% of annual income, in order to own a home in the city.

 

The 5 Most Affordable Housing Markets

 

1. Detroit, MI continues its reign as the most affordable city in which to own a home in America. With median home prices at $49,900, coupled with household income of $27,838, families on average only need to spend 13% of total annual income to own. This percentage remains significantly below the remainder of the country.

2. Wichita, KS jumped one spot to become the second most affordable market, driven by a 4.35% drop in homeownership burden. Mortgage and tax costs equate to $684 per month, or about 16.8% of annual household income, to own a home.

3. Fort Wayne, IN saw its affordability index remain relatively steady this month. The average Fort Wayne family would only need to spend $652 per month to cover the costs of homeownership in the city.

4. Cleveland, OH remained constant this October to hold the fourth most affordable spot. Given median home prices of $84,900 and household income of $27,854, Cleveland families only need to allocate 19.9% of annual income toward mortgage and tax costs.

5. Bakersfield, CA remained in the fifth most affordable spot for the second month in a row, further bolstered by a drop in home sales prices to $212,520. The average household in the city would only need to allocate 21.1% of annual income to pay for their home.

 

Notable Changes This October

 

  • Durham, NC rose five spots to 49th place on our list. The average household in the city looking to purchase should expect to pay $1,441 per month, or 31.9% of annual income, toward homeownership costs.
  • Pittsburgh, PA dropped seven spots to 60th place, becoming more affordable for homeowners in the month. The average household only would need to allocate 29.4% of annual income toward homeownership costs.
  • Memphis, TN came in at 75th place on our list, a drop of seven spots from last month. The average household would only need to spend $860 per month to own a home.
  • Omaha, NE increased four spots to 82nd place, as the city’s homeownership burden rose 2.56%. Despite this increase, Omaha remained one of the most affordable cities in the country in this metric.

 

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