Finding affordable housing in America right now is difficult, but not impossible, at least as evidenced by the May 2023 RealtyHop Housing Affordability Index, which found Detroit remains the most affordable housing market this month.
The study analyzes housing affordability and burden of ownership in the 100 most populous cities in the country. Median home prices are calculated using the more than 300,000 listings in RealtyHop’s database for the month prior to publication.
To calculate the index, the following data are used:
estimated median household income
Average listing price of homes for sale via RealtyHop data
Local property taxes via ACS census data
Mortgage expense, assuming 30-year mortgage, 5.5% interest rate, and 20% down payment.
Main results of the study:
Homeowners in 66 major cities must spend more than 30% of their annual income on home ownership; That’s one city less than last month.
In 25 of the nation’s most unaffordable housing markets, homeowners spend more than 40% of their income on home ownership.
Median purchase prices decreased this month in the three least affordable housing markets: Miami, FL, Los Angeles, CA and Newark, NJ.
5 Most Affordable Housing Markets According To RealtyHop
1. Detroit, MI
The median home purchase price rose slightly to $81,900. Based on an estimated median household income of $35,893, a typical Detroit household would spend 16.23% of their annual income, or $485.37 per month, on mortgage payments and property taxes.
2. Wichita, Kansas
In Wichita, those with a median household income of $62,057 must allocate 19.45% of their income to housing costs, up 2.52% from April.
3. Cleveland, OH
Potential buyers generating a median household income of $36,709 would spend $1,005 in mortgage payments and property taxes.
4. Fort Wayne, IN
The median home sale price dropped to $204,900, and homeowners can expect to spend $1,089 in mortgage payments and property taxes each month.
5. San Luis, Mo.
The median listing price for a home is currently $179,000, and buyers must allocate 22.13% of their income toward home ownership costs.