September 26, 2022

The least affordable housing market in the United States

The least affordable housing market in the United States

There appears to be some calm in the housing market. But that does not mean that home prices are becoming affordable everywhere.

according to RealtyHop’s Housing Affordability Index, many cities in the United States are still unaffordable. Of the 100 cities in the index, the average American would have to devote at least 40% of their income to owning a home in 42 of them.

The index takes into account median household income, average selling prices using RealtyHop listings, local property taxes using American Community Survey (ACS) census data and mortgage expenses. The projected mortgage expense assumes a 30-year mortgage, an interest rate of 5.5%, and a down payment of 20%.

Here are the 12 lowest affordable housing markets in the United States, along with median household income, median home price and the percentage of income required to afford homeownership everywhere.

1. Miami

  • Average family income: $44,581
  • Average house price: 610 thousand dollars
  • Income share: 87.39%

2. Los Angeles

  • Average family income: $69,695
  • Average house price: $975,000
  • Income share: 85.34%

3. New York

  • Average family income: $68,129
  • Average house price: $925,000
  • Income share: 82.47%

4. Newark, New Jersey

  • Average family income: $38854
  • Average house price: $385,000
  • Income share: 77.52%

5. Hialeah, Florida

  • Average family income: $40,036
  • Average house price: $465,000
  • Income share: 72.55%

6. Long Beach, California

  • Average family income: $70,677
  • Average house price: $799,000
  • Income share: 69.77%

7. San Francisco

  • Average family income: $126,117
  • Average house price: $1,388,000
  • Income share: 66.56%

8. San Diego

  • Average family income: $89,357
  • Average house price: $950,000
  • Income share: 65.65%

9. Anaheim, California

  • Average family income: $80,486
  • Average house price: $834.250
  • Income share: 63.98%

10. Santa Ana, California

  • Average family income: $74,185
  • Average house price: 750 thousand dollars
  • Income share: 62.14%

11. Oakland, California

  • Average family income: $82,649
  • Average house price: $798000
  • Income share: 60.85%

12. Boston

  • Average family income: $79,797
  • Average house price: $775,000
  • Income share: 59.38%

To become a homeowner, the average family living in Miami, Los Angeles, or New York must allocate more than 80% of their annual income to housing. The remaining 20% ​​should be enough to cover all other expenses, which is likely unsustainable.

Kevin O’Leary, a judge on CNBC’s “Money Court,” She advises potential homeowners to follow the rule upon purchase. This means that only half of your after-tax income should go to your home. Anyone earning an average income in any of the above places would be off that rule.

Instead, “you may have to live in a smaller apartment if you’re renting, or buy a smaller home to start,” O’Leary previously told CNBC Make It.

O’Leary’s rule is similar to The advice was first issued by the US government in 1981 It states that you should aim to spend no more than 30% of your income on housing costs, including mortgage interest, property taxes, and maintenance.

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