Miami again topped the list of least affordable U.S. housing markets in July, ahead of Los Angeles and New York, according to RealtyHop.
Even though the median home price in Miami fell slightly in July compared to June, to $600,000, the city remained the least affordable based on a projected median household income of about $45,000. That means the average family would have to set aside a whopping 86 percent of its annual income to afford a home.
In a visit to a new affordable housing development last month, HUD Secretary Marcia Fudge called Miami “the epicenter of the housing crisis in this country.” Record rents and high occupancy rates have been fueled in part by out-of-state migration to Miami.
Traditionally, homeowners and renters should spend no more than 30 percent of their income on housing, though that is unrealistic for a majority of Americans. Overall housing affordability dropped to a 15-year low in May, according to a Zillow report from June.
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Hialeah, which is in Miami-Dade County and northwest of the city of Miami, is making its way up RealtyHop’s list. The city ranked fifth-least affordable, with a median home asking price of $449,000 in July, and a projected median household income of just over $40,000. A family in Hialeah would have to contribute about 70 percent of its annual income toward home ownership costs.
The July affordability index takes rising interest rates into account and assumes buyers are financing their purchases with 30-year fixed-rate mortgages with 5.5 percent interest rates. It looks at the top 100 most populous cities.
Los Angeles moved up to the second least affordable housing market for buyers, based on a median home asking price of $969,000, requiring buyers to spend about 85 percent of their annual income on homeownership costs.
New York fell to No. 3 on RealtyHop’s index. New Yorkers would have to also spend about 85 percent of their median annual income of about $68,000 to buy a home. The median home asking price fell to $949,000 in July.
Newark was the fourth least affordable city in the country, where the median price for homes fell to $380,000. A family in Newark making the projected median income of about $39,000 would have to contribute about 76 percent of that income for mortgage payments and property taxes.