At the national level, housing affordability fell in August compared to the previous month, according to NAR’s Housing Affordability Index. The monthly mortgage payment increased by 2.9% compared to the prior month, while the median price of single-family homes declined modestly by 0.8%. The monthly mortgage payment increased by $63 from last month.
Compared to one year ago, affordability fell in August as the monthly mortgage payment climbed 26.2% and median family income rose 4.7%. The effective 30-year fixed mortgage rate was 7.15% this August compared to 5.29% one year ago. Nationally, mortgage rates were up 186 basis points from one year ago (one percentage point equals 100 basis points). Mortgage rates moved above 7% for the first time since July 2001. The median existing-home sales price rose 3.7% from ($413,500) compared to one year ago ($398,800).
The national index is currently below 100, which means that the typical family cannot afford to buy based on the median-priced home. An index below 100 means that a family with a median income had less than the income required to afford a median-priced home. The income required to afford a mortgage, or the qualifying income, is the amount needed so that mortgage payments on a 30-year fixed mortgage loan with a 20% down payment account for 25% of family income. The most affordable region was the Midwest, with an index value of 119.7 (median family income of $95,919 with a qualifying income of $80,160). The least affordable region remained the West, where the index was 66.3 (median family income of $107,168 and the qualifying income of $161,616). The South was the second most affordable region with an index of 93.2 (median family income of $90,451 and a qualifying income of $97,056). The Northeast was the second most unaffordable region with an index of 88.8 (median family income of $110,174 with a qualifying income of $124,128).
A mortgage is affordable if the mortgage payment (principal and interest) amounts to 25% or less of the family’s income.
Housing affordability had double-digit declines from a year ago. The Midwest region has the most significant decline of 19.6%, followed by the Northeast with a dip of 19.1%. The South experienced a weakening in price growth of 16.4%, followed by the West, which fell 14.2%.
Affordability was down in all four regions from last month. The Northeast region had the most significant dip of 2.8%, followed by the South with a decline of 2.4%. The West region had a decrease of 1.5%, followed by the Midwest region had the smallest decline of 1.2%.
Compared to one year ago, the monthly mortgage payment rose to $2,234 from $1,770, an increase of 26.2%. A year ago, the monthly mortgage payment increased by $464. The annual mortgage payment as a percentage of income inclined to 27.3% this August from 22.6% a year ago. Regionally, the West has the highest mortgage payment to income share at 37.7% of income. The Northeast had the second-highest share at 28.2%, followed by the South with a share of 26.8%. The Midwest had the lowest mortgage payment as a percentage of income at 20.9%. Mortgage payments are not burdensome if they are no more than 25% of income.
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 AFFORDABILITY TOP 100 LARGEST CITIES
CITY AVG NCOME AVG PRICE AVG PITI PITI PCT OF INCOME
1 Miami FL $48,125 $615,000 $3,304.16 82.39%
2 Los Angeles $73,560 $949,000 $4,839.68 78.95%
3 Newark NJ $41,045 $399,900 $2,535.87 74.14%
4 Hialeah FL $43,219 $469,900 $2,431.89 67.52%
5 New York $72,128 $795,000 $4,056.70 67.49%
6 Oakland $87,232 $899,000 $4,753.28 65.39%
7 Long Beach $74,596 $749,000 $3,861.61 62.12%
8 Anaheim $84,949 $849,000 $4,367.88 61.70%
9 Santa Ana $78,299 $750,000 $3,843.15 58.90%
10 Irvine $124,442 $1,100,000 $5,812.84 56.05%
11 San Diego $94,312 $850,000 $4,385.25 55.80%
12 San Jose CA $129,73 . $1,129,000 $5,864.94 54.25%
13 Jersey City $82,504 $625,000 $3,660.13 53.24%
14 Boston MA $84,428 $729,000 $3,716.60 52.82%
15 San Francisco . $133,111 $1,145,000 $5,826.27 52.52%
16 Chula Vista CA $96,205 $675,000 $3,602.03 44.93%
17 Fremont CA $157,857 $1,150,000 $5,906.05 44.90%
18 New Orleans $47,765 $340,000 $1,783.72 44.81%
19 Reno NV $73,780 $549,900 $2,751.92 44.76%
20 Riverside CA $81,731 $585,000 $3,033.91 44.54%
21 Scottsdale $107,790 . $799,950 $3,965.83 44.15%
22 Austin TX $88,278 $540,000 $3,176.92 43.19%
23 Richmond $55,695 $362,450 $1,927.72 41.53%
24 - Stockton CA $64,649 $420,000 $2,208.99 41.00%
25 Dallas TX $64,849 $370,126 $2,175.88 40.26%
27 Seattle WA $112,623 $719,000 $3,725.09 39.69%
28 Honolulu $83,129 $560,000 $2,694.91 38.90%
29 Denver $83,763 $544,190 $2,705.90 38.77%
30 Las Vegas $70,723 $448,000 $2,271.18 38.54%
31 Tucson $53,062 $320,000 $1,680.34 38.00%
32 . Tampa FL $66,346 $394,900 $2,098.65 37.96%
34 St. Petersburg $70,226 $419,000 $2,205.18 37.68%
35 Fresno CA $59,698 $355,000 $1,867.74 37.54%
36 Orlando FL $63,787 $369,250 $1,994.03 37.51%
37 DC $97,301 $599,000 $3,030.89 37.38%
38 Phoenix AZ $70,211 $430,000 $2,168.90 37.07%
39 Atlanta GA $72,225 $405,000 $2,203.46 36.61%
40 Fort Worth $76,698 $377,635 $2,326.08 36.39%
41 Madison WI $79,388 $385,000 $2,392.33 36.16%
42 Glendale AZ $67,231 $400,000 $2,019.57 36.05%
43 Houston TX $64,551 $330,000 $1,937.34 36.02%
44 Chicago IL $67,463 $350,000 $2,024.16 36.01%
45 Durham NC $72,858 $399,000 $2,174.09 35.81%
46 Norfolk VA $60,811 $335,000 $1,806.28 35.64%
47 Aurora CO $79,499 $460,000 $2,329.47 35.16%
48 Portland OR $88,236 $475,000 $2,585.22 35.16%
49 Bakersfield CA $74,740 $395,000 $2,163.17 34.73%
50 Mesa AZ $71,093 $410,000 $2,054.35 34.68%
51 Paradise NV $60,630 $349,900 $1,746.39 34.56%
52 Irving TX $80,004 $375,000 $2,282.02 34.23%
53 El Paso TX $58,668 $264,950 $1,673.32 34.23%
54 Arlington TX $74,705 $345,000 $2,091.55 33.60%
55 Cincinnati $49,054 $230,000 $1,362.25 33.32%
56 Arlington, VA $141,533 $739,000 $3,914.16 33.19%
57 Plano TX $117,910 $534,700 $3,192.16 32.49%
58 Colorado Springs $79,025 $429,000 $2,122.19 32.23%
59 Buffalo NY $42,099 $199,000 $1,108.22 31.59%
60 Albuquerque $64,209 $309,999 $1,673.81 31.28%
61 Winston-Salem $56,587 $269,950 $1,470.46 31.18%
62 Charlotte $77,696 $379,000 $2,012.74 31.09%
63 Jacksonville FL $67,415 $323,250 $1,714.47 30.52%
64 San Antonio $64,695 $266,999 $1,636.70 30.36%
65 Garland TX $75,494 $314,500 $1,904.12 30.27%
66 Henderson NV $93,052 $457,479 $2,312.35 29.82%
67 Chandler AZ $101,329 $495,000 $2,495.30 29.55%
68 Laredo TX $58,698 $235,000 $1,438.59 29.41%
69 Raleigh NC $83,199 $379,990 $2,014.26 29.05%
70 St. Paul MN $70,597 $299,900 $1,697.97 28.86%
71 Greensboro NC $60,562 $266,000 $1,456.56 28.86%
72 Gilbert AZ $118,353 $555,000 $2,783.18 28.22%
73 Lexington KY $70,139 $310,000 $1,643.72 28.12%
74 Minneapolis $76,339 $315,000 $1,774.71 27.90%
75 Corpus Christi $69,478 $270,000 $1,606.87 27.75%
76 Philadelphia $53,325 $230,000 $1,228.24 27.64%
77 Baton Rouge $51,056 $232,000 $1,159.15 27.24%
78 Memphis TN $50,343 $200,000 $1,142.95 27.24%
79 Milwaukee $50,840 $180,000 $1,152.03 27.19%
80 Lincoln NE $73,628 $279,900 $1,658.44 27.03%
81 Baltimore $57,700 $219,000 $1,273.66 26.49%
82 Tulsa OK $56,446 $225,000 $1,238.29 26.33%
83 Indianapolis $57,948 $235,000 $1,256.55 26.02%
84 Lubbock TX $62,226 $222,000 $1,340.95 25.86%
85 Louisville $65,420 $264,900 $1,403.13 25.74%
86 Pittsburgh $56,558 $214,900 $1,201.01 25.48%
87 Anchorage $97,716 $360,000 $2,007.99 24.66%
88 Columbus OH $64,872 $224,000 $1,326.20 24.53%
89 Chesapeake VA $92,696 $355,900 $1,894.35 24.52%
90 Virginia Beach $90,303 $350,000 $1,842.92 24.49%
91 Omaha NE $76,619 $257,000 $1,552.72 24.32%
92 Birmingham AL $44,338 $180,000 $897.76 24.30%
93 Kansas City $65,860 $235,000 $1,307.07 23.82%
94 Oklahoma City $65,812 $239,900 $1,292.21 23.56%
95 Fort Wayne IN $59,810 $220,000 $1,169.65 23.47%
96 Cleveland $37,306 $115,000 $687.20 22.11%
97 St. Louis $53,345 $175,000 $945.20 21.26%
98 Wichita KS $63,360 $183,500 $1,031.59 19.54%
99 . Detroit MI $36,673 $79,000 $468.18 15.32%
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