The RealtyHop Home Affordability Index, for March 2023, notes that Miami, Florida, ranked as the least affordable market in the US. to buy a house right now.
In this issue, RealtyHop examined what American households in the 100 largest cities must spend on housing.
To calculate the index, the real estate company considers the following concepts: Projected median household income; average listing prices of homes for sale through RealtyHop data; local property taxes via ACS census data; and mortgage expenses, assuming a 30-year mortgage, 5.5% interest rate, and 20% down payment.
“With interest rates and purchase prices declining in many markets across the country, prospective homebuyers have more choice and purchasing power than in 2022,” the RealtyHop report states. “While homeownership remains unaffordable in most markets, those who refrained from buying a property last year may find the current conditions more favorable”.
According to the March study, RealtyHop found that:
– The owners in 68 major cities must spend more than 30% of their annual revenue in the cost of home ownership.
– In some affordable markets across the country, homeowners spend less than $1,000 per month on mortgage payments and property taxes.
– Homes stay on the market longer and, combined with lower interest rates, many markets offer more favorable conditions for potential buyers than the competitive seller’s market of 2022.
The 5 least affordable housing markets, according to RealtyHop:
1. Miami, Florida
With a median household income of $46,211, potential homeowners can expect spend 81.62% of your income on a median-priced property that costs $585,000. However, RealtyHop highlights that lower interest rates and declining home prices signal the start of a cooling market that may inspire more potential buyers in the coming months.
2. Los Angeles, California
In Los Angeles residents can expect to spend 81.35% of their income to housing expenses, which is equivalent to $4,844.78 per month, for an average property of $950,000. The city is home to many high-value properties, generally making homeownership unaffordable for many potential buyers.
3. Newark, NJ
The median purchase price of a home in this city is $389,000 and the residents spend 74.11% of their income in mortgage payments and property taxes.
4. New York, New York
With the fourth least affordable housing market in the country and a median household income of $70,118, residents must spend 68.90% of your money on housing costs.
5. Hialeah, Florida
Property here costs a median purchase price of $440,000, but residents should expect to spend $2,277.15 per month on housing costs like mortgage payments and property taxes, something like 65.9% of their income.
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