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Least affordable housing markets in the U.S.

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The housing market seems to be cooling. But that doesn’t mean homes are everywhere affordable.

according to RealtyHop Housing Affordability Index, many US cities still can’t afford. Of the 100 cities included in the index, the average American must spend at least 40% of their income on owning a home in 42 of them.

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

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

1. Miami

  • Median household income: $44,581
  • Median house price: $610,000
  • Income share: 87.39%

2. Los Angeles

  • Median household income: $69,695
  • Median house price: $975,000
  • Income share: 85.34%

3. New York

  • Median household income: $68,129
  • Median house price: $925,000
  • Income share: 82.47%

4. Newark, New Jersey

  • Median household income: $38,854
  • Median house price: $385,000
  • Income share: 77.52%

5. Hialeah, Florida

  • Median household income: $40,036
  • Median house price: $465,000
  • Income share: 72.55%

6. Long Beach, California

  • Median household income: $70,677
  • Median house price: $799,000
  • Income share: 69.77%

7. San Francisco

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

8. San Diego

  • Median household income: $89,357
  • Median house price: $950,000
  • Income share: 65.65%

9. Anaheim, California

  • Median household income: $80,486
  • Median house price: $834,250
  • Income share: 63.98%

10. Santa Ana, California

  • Median household income: $74,185
  • Median house price: $750,000
  • Income share: 62.14%

11. Oakland, California

  • Median household income: $82,649
  • Median house price: $798,000
  • Income share: 60.85%

12. Boston

  • Median household income: $79,797
  • Median house price: $775,000
  • Income share: 59.38%

To be a homeowner, the average family in Miami, Los Angeles, or New York must spend at least 80% of their annual income on their home. The remaining 20% ​​should be enough to cover all other expenses, which is probably unsustainable.

CNBC’s “Money Court” Judge Kevin O’Leary said: Advise potential homeowners to follow ⅓ rules when buying. This means that only 1/3 of his after-tax income should go to the house. Anyone earning the median income in any of the above locations is well off that rule.

Instead, “you may need to live in a small apartment if you’re renting, or buy a small house to get started,” O’Leary previously told CNBC Make It.

O’Leary’s rule looks like this: Recommendation first issued by the U.S. government in 1981 It states that housing costs, including mortgage interest, property taxes and maintenance costs, should not exceed 30% of income.

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