RealtyHop Housing Affordability Index: September 2019

Posted August 29th, 2019

In this September 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 market this month, despite a dip of 0.42% in its affordability index. Given a median home price of just under $900,000, as well as local mortgage and tax rates, the average household would need to allocate a staggering 91.5% of income in order to own a home.

2. Miami, FL was slightly more affordable in the month, seeing a 0.2% drop in homeownership burden. The city remained in second place on our list with an affordability index of 85.93%.

3. New York, NY saw an increase in home asking prices this September to $899,900, leading to a small jump in homeownership burden. The average household would need to allocate 85.3% of income to own a home in the city.

4. San Francisco, CA remained in fourth place on our list with an affordability index of 78.13%. This represented an increase of over 3.6% when compared with August. The median asking price for a home in San Francisco is now $1.375 million, the highest of any city on our list.

5. Boston, MA broke our top five least affordable markets for the first time. An increase in home sales prices to $729,000 led to this rise. The average household in the city now needs to allocate 65.71% of annual income toward homeownership costs.

 

The 5 Most Affordable Housing Markets

 

1. Detroit, MI continued to be the most affordable housing city this September. With a median home price of $50,000, along with average household income of $27,838, Detroit remains extremely affordable. Households only need to spend 13.04% of total annual income to own a home.

2. Fort Wayne, IN saw its affordability index remain steady this month. The average Fort Wayne family would only need to spend $652 per month, or 17.08% of annual income, in order to pay mortgage and tax costs in the city.

3. Wichita, KS saw a slight 0.68% drop in homeownership burden this September, though still remained the third most affordable market in the country. Total homeownership costs for the average household came in at an affordable $715 per month.

4. Cleveland, OH was again a great option with an affordability index of only 19.86%. This means that the average household in the city would only need to allocate about one fifth of total annual income toward costs of owning a home.

5. Bakersfield, CA broke the top five most affordable markets for the first time this month. A drop in home sales prices led the charge, as the city’s index dipped 7.7% since last month.

 

Notable Changes This September

 

  • Atlanta, GA came in 30th place this month, a drop of four spots since August. Though more affordable than last month, the city still require the average household to allocate 39% of income toward owning a home.
  • Birmingham, AL rose five spots to 38th on our list this month. Residents in the city need to allocate about $1,000 per month toward homeownership costs, or 35.5% of median annual income.
  • New Orleans, LA dropped seven spots to 49th place. The average household in the city should expect to pay 31.8% of annual income when owning a home.
  • Lincoln, NE came in at 81st place on our list, becoming even more affordable in the month. A family in Lincoln would only need to spend $1,136 per month, or 25.7% of annual 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.

 

See below for the previous RealtyHop Housing Affordability Indexes:

Full Dataset