Miami ranked first on the list of least affordable housing markets in the US, according to a new study by Reality Hop, followed by New York and Los Angeles, while Wichita, Kansas, and Fort Wayne, Indiana are the cheapest.
A December Real Estate study found that in 100 of the largest cities in the US, 75 require that families spend more than 30 percent of their income on housing.
U.S. families who spend more than 30 percent of their income on housing are considered “cost-burdened,” according to the Department of Housing and Urban Development.
The study is based on homes with a 30-year fixed-rate mortgage with an interest rate of 5.5 percent. Earlier this month, the Federal Reserve stepped up its inflation fight, raising interest rates for the seventh time this year and announcing further hikes.
Panoramic view of South Beach in Miami’s South Pointe Park, the city forces families to pay 85.67 percent of their income for housing
In Miami, families are forced to spend 85.67 percent of their income on housing, with the median home price in the city being $560,000. According to Reality Hop, there was no change in the seven most expensive cities between November and December.
Los Angeles demands 83 percent of income, New York City residents have to spend 79 percent to live in the Big Apple, while residents of Newark across the Hudson River have to shell out over 75 percent of their income and in Hialeah only west of Miami, requires a monthly payment of 72 percent of income.
The median cost of a home in Los Angeles is $965,000 while the median price in New York City is $749,000.
Rounding out the top ten least affordable cities were San Francisco, Long Beach, Oakland, San Diego and Jersey City, New Jersey.
It was Oakland that saw the biggest jump in unaffordability as the city’s home prices soared from $812,500 to $850,000. Between November and December, the light side of the bay jumped from 11th on the priceless list to 8th.
Among the homes for sale in Miami is Joe Jonas and Sophie Turner’s waterfront mansion, which the couple bought for $11 million in 2021 and are now looking to sell for $17 million.
A separate study conducted earlier this year found that Miami-Dade County, where Florida’s two contenders make the list of least affordable, is only the sixth-wealthiest county in Florida.
On the market: Joe Jonas and Sophie Turner have listed their stunning Miami mansion for a whopping $17 million; seen the couple in October
Los Angeles demands 83 percent of the income, New Yorkers have to spend 79 percent to be able to live in the Big Apple
The higher cost of living makes apartments in the big cities more expensive
The cheapest housing markets are found in Wichita, Kansas, Fort Wayne, Indiana, Detroit, Cleveland and Lubbock, Texas.
The average home price in Wichita is just $145,000, in Fort Wayne it’s around $165,000 and in Detroit it’s just $90,000.
The other cities on the cheapest list were Louisville, Kentucky, Anchorage, Virginia Beach, Omaha, and Pittsburgh.
Between November and December, the city of Chandler, Arizona, fell seven spots on the list as home prices fell 4.5 percent.
Overall, existing home sales in the U.S. fell 7.7 percent from October to November, according to the National Association of Realtors — and November sales were down a whopping 35.4 percent year over year.
The NAR added that the current 10-month streak of declines is the longest recorded in the data since 1999.
In the opposite direction on the reality hop list was Orlando, which rose eight places as home prices rose to $370,000 from $357,000. The current statistics say that average households have to spend 40 percent of their income on financing the apartment.
Of the ten least affordable cities in the US, two are in Florida, three are in New York and New Jersey, and the other five are in California.
The ten cheapest cities are spread across ten states.
The report states, “As interest rates continue to rise and real estate sentiment plummets, many prospective homebuyers continue to question whether they will ever be able to own a home.”
On the plus side, the study showed that 57 percent of US cities became more affordable.
US existing home sales fell again in November, marking the tenth consecutive month of market decline, continuing the longest streak of declines in sales in 23 years.
According to the National Association of Realtors, existing home sales were down 7.7 percent in November from October — November sales were down a whopping 35.4 percent year-on-year.
Real estate experts are advising homebuyers to avoid Austin, Phoenix, Las Vegas and other Sun Belt locations as prices are likely to fall in 2023 and instead invest in the Midwest and Northeast, where homes hold their value
Average US home prices have fallen to $417,000, a new report has revealed – although its authors said it may still be premature to go out and buy
The existing home sales rate has fallen a whopping 35.4 percent since January. Americans are reluctant to buy homes for a variety of reasons, including the doubling of the 30-year waiting period for mortgages
The interest rate on 30-year mortgages fell slightly to 6.7 percent in November from 6.9 percent in October. However, there were weeks earlier in the month when the rate was above 7 percent
The NAR added that the current 10-month streak of declines is the longest recorded in the data since 1999.
Existing home sales are down about 37 percent from their recent peak in January.
The 30-year mortgage rate, which topped 7 percent in the first few weeks of November, eventually fell and averaged about 6.7 percent, down 6.9 percent from October.
The current rate remains more than double the 3.1 percent seen at the end of 2021.
The rise in mortgage rates, which has increased expected monthly payments by hundreds of dollars, has left many potential buyers out of the market.
Home prices are up 3.5 percent to $370,700 since last November, when they were $353,900, but are down from their June peak of $413,000.
NAR chief economist Lawrence Yun said the newly released numbers “clearly reflect this rapid rise in mortgage rates.”
As the central bank continues to raise interest rates to curb inflation, the housing market continues to cool.
This week, real estate brokerage firm Redfin released a list of the best and worst places to buy a home in the United States. The top cities where prices will increase in 2023 included Milwaukee, Chicago, Lake County, Illinois, Albany, and New Haven, Connecticut.
The worst places were Las Vegas, Phoenix and Austin, Texas. Among the nation’s most populous cities, Las Vegas, Phoenix and Austin led the imminent decline in sales. Sales in Vegas were down 63.8 percent in November from a year earlier, with Phoenix down 58 percent and Austin down 57.7 percent.
“If you want to avoid a situation where you buy a house and then it goes down in value over the next few months, I would avoid the Sun Belt,” Fairweather told Fox Business.
Instead, the real estate expert said the safest investments “would be in the Midwest and Northeast because those areas tend to hold their value.”