The Least Affordable Housing Markets in the United States

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There seems to be some cooling in the housing market. But that doesn’t mean homes are getting more affordable everywhere.

According RealtyHop Housing Affordability Index, many cities in the United States are still difficult to pay. Of the 100 cities in the index, the average American is expected to spend at least 40% of their income owning a home in 42 of them.

The index takes into account median household income, median sale prices using RealtyHop listings, local property taxes using American Community Survey (ACS) census data, and mortgage spending . Projected mortgage expenses assume a 30-year mortgage, 5.5% interest rate and 20% down payment.

Here are the 12 least affordable housing markets in the United States, along with the median household income, median house price, and percentage of income required to own in each location.

1.Miami

  • Median household income: $44,581
  • Median house price: $610,000
  • Revenue sharing: 87.39%

2.Los Angeles

  • Median household income: $69,695
  • Median house price: $975,000
  • Revenue sharing: 85.34%

3. New York

  • Median household income: $68,129
  • Median house price: $925,000
  • Revenue sharing: 82.47%

4. Newark, New Jersey

  • Median household income: $38,854
  • Median house price: $385,000
  • Revenue sharing: 77.52%

5. Hialeah, Florida

  • Median household income: $40,036
  • Median house price: $465,000
  • Revenue sharing: 72.55%

6. Long Beach, California

  • Median household income: $70,677
  • Median house price: $799,000
  • Revenue sharing: 69.77%

7. San Francisco

  • Median household income: $126,117
  • Median house price: $1,388,000
  • Revenue sharing: 66.56%

8.San Diego

  • Median household income: $89,357
  • Median house price: $950,000
  • Revenue sharing: 65.65%

9. Anaheim, California

  • Median household income: $80,486
  • Median house price: $834,250
  • Revenue sharing: 63.98%

10. Santa Ana, California

  • Median household income: $74,185
  • Median house price: $750,000
  • Revenue sharing: 62.14%

11. Oakland, California

  • Median household income: $82,649
  • Median house price: $798,000
  • Revenue sharing: 60.85%

12. Boston

  • Median household income: $79,797
  • Median house price: $775,000
  • Revenue sharing: 59.38%

To be a homeowner, an average family living in Miami, Los Angeles or New York would need to spend more than 80% of their annual income on housing. The remaining 20% ​​should be enough to cover all other expenses, which is probably unsustainable.

Kevin O’Leary, judge on CNBC’s “Money Court” advises potential owners to follow the ⅓ rule during the purchase. This means that only ⅓ of your after-tax income should go to your home. Anyone earning the median income in any of the above places would be well outside this rule.

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

O’Leary’s rule is similar to notice first issued by the US government in 1981 stating that you should not spend more than 30% of your income on housing costs, including mortgage interest, property taxes and maintenance.

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