In this October 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?
Homeownership is still unaffordable for many residents across the country. In most cities, housing costs increased or remained the same from last month, further limiting options for potential buyers. Those looking to purchase property this season will likely continue to face low inventory and high interest rates, even in more affordable markets.
Key Findings
- Homeowners in 66 out of the 100 major cities we analyzed spend over 30% of their annual income on homeownership; that’s the same as last month.
- In the 25 most unaffordable housing markets nationwide, homeowners still allocate 40% or more of their income toward homeownership costs.
- Two of the top five least affordable housing markets became more expensive this month – Los Angeles, CA, and New York City, NY.
- Housing costs became more affordable in one of the more affordable housing markets this month – Wichita, KS.
The 5 Least Affordable Housing Markets
1. Miami, FL
Miami is still the least affordable housing market this October. The median list price for a home remained the same, meaning homeowners can expect to spend $3,304 monthly on mortgage and property tax payments. While the city’s luxury housing options continue to appeal to wealthier homebuyers, middle-class residents are struggling to purchase property.
2. Los Angeles, CA
Los Angeles is again the second most cost-burdened housing market. The median asking price increased to $949,000 this month, and families must now expect to spend 78.95% of their annual income on the cost of owning a home.
3. Newark, NJ
Newark continues to be the third most unaffordable housing market nationwide. The median purchase price for a home did not change this month, meaning residents with a household income of $41,045 must spend 74.14% of that on their mortgage and property taxes.
4. Hialeah, FL
Hialeah is the country’s fourth least affordable housing market. Buyers with the median income of $43,219 should expect to spend 67.52% of it on homeownership costs.
5. New York, NY
New York City rounds out our least affordable housing markets this October. Home prices increased to a median of $795,000, with buyers now needing to spend $4,057 monthly to own. While market conditions continue to impact transaction volume, Brooklyn properties and co-ops that need remodeling remain a potential option for buyers.
The 5 Most Affordable Housing Markets
1. Detroit, MI
Detroit is again the most affordable housing market this October. The median purchase price for a home increased slightly to $79,000, meaning that the average family would need to spend just $468 monthly on mortgage payments and property taxes.
2. Wichita, KS
Wichita is the second most affordable housing market nationwide. Housing became more affordable this month, as homeowners with a median income of $63,360 can expect to spend only 19.54% of their income to own a home.
3. St. Louis, MO
St. Louis continues to be the third most affordable housing market nationwide. Home prices remained the same from last month at $175,000, meaning a household with an average income needs to only spend $945 monthly on homeownership costs.
4. Cleveland, OH
Cleveland remains the fourth most affordable market this October. An average family making $37,306 would only need to spend 22.11% of their income on mortgage and tax costs to own a home. While Cleveland works to construct new homes, it must also address property tax concerns from current homeowners.
5. Fort Wayne, IN
Fort Wayne became the fifth most affordable housing market in the country this month. A median-priced home costs $220,000, and households can expect to spend a reasonable $1,170 per month on homeownership costs.
Housing Markets to Watch
The following housing markets witnessed significant changes this month.
Fremont, CA
Fremont jumped in the rankings to become the 17th least affordable housing market this month. The median housing price increased 5.5% to $1,150,000. Median homeowners must now spend 44.90% of their income on mortgage payments and property taxes.
Norfolk, VA
Norfolk increased to the 47th least affordable housing market. Prospective buyers with a median income of $60,811 should expect to spend $1,806 monthly on homeownership.
Madison, WI
Madison decreased seven spots to become the 42nd least affordable housing market. In this city, the median purchase price for a home is $385,000, and households spend 36.16% of their income on housing costs.
Methodology
The RealtyHop Housing Affordability Index analyzes 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.
Methodology Update
To better reflect the current housing market for the general America homebuyers, we have updated our methodology to include only the following property types: single-family homes, module homes, condos, co-ops, and townhouses. You may therefore see discrepancies between prior reports based on this change.
See below for previous RealtyHop Housing Affordability Studies:
- RealtyHop Housing Affordability Index: September 2023
- RealtyHop Housing Affordability Index: August 2023
- RealtyHop Housing Affordability Index: July 2023
