RealtyHop published the Housing Affordability Index in which it examines what American households in the 100 largest cities in the country spend on housing and found that in the month of February 2023, the market with the most affordable offers is in Fort Wayne.
Given the costs of mortgages and high home prices, homeowners must plan strategically to afford the cost of owning real estate.
While some experts don’t expect interest rates or housing costs to change dramatically this year, cities that remain affordable could create opportunities for buyers who saved last year to make a down payment on a home.
To calculate the index, RealtyHop uses the following statistics:
– Projected median household income
– Average listing prices of homes for sale through RealtyHop data
– Local property taxes through ACS census data
– Mortgage expenses, assuming a 30-year mortgage, 5.5% interest rate and 20% down payment.
In this report, the real estate company found the following key results:
– 56% of cities became more affordable this month, indicating declining home prices and potentially good news for homebuyers.
– Homeowners in 67 major cities still need to spend more than 30% of their annual income to own a home.
– In areas where population and housing costs increased during the pandemic, house prices are now beginning to decline.
The 5 most affordable housing markets, according to RealtyHop:
- Fort Wayne, Indiana
Fort Wayne residents can take pride in the city’s new title as the most affordable housing market in the country. The median home price dropped to $155,000 this month, meaning households earning a standard income only have to spend 16.94% of their paychecks to own a home. This marks the first time Fort Wayne has been the most affordable real estate market since August 2022.
- Wichita, Kansas
The cost of owning a home in Wichita increased slightly to $155,000, where a household must now put 17.09% of their income towards mortgage payments and property taxes.
- Detroit, Michigan
In Detroit, households earning a median salary of $35,528 will only need to spend 17.67% of their income on property payments, or about $1,250 per month. Median cost of ownership is $84,900.
- lubbock, texas
The median sales price of a home in this city decreased to $175,000. Households earning the median income only need to spend 21.14% of their income on monthly housing payments.
- Cleveland, Ohio
In Cleveland, the median home price rose slightly by $450 to $109,900. Households earning a median income of $36,229 spend 21.39% of their paycheck annually to own property.
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