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Cities Losing the Affordability Battle

Los Angeles, California, remained the least affordable market in the country with a median home price of just under $900,000, according to the latest statistics from RealtyHop.  [1]

While there was a slight dip of 0.42% in RealtyHop’s affordability index, homeowners would need to use 91.5% of their income to afford a home in the city of angels. The average household income in Los Angeles is just $54,501.

Miami, Florida, held steady at No. 2, as homeowners would need to use 85.93% of their income to afford a home. New York, New York (85.3%), San Francisco, California (78.13%), and Boston, Massachusetts (65.71%) followed. 

San Francisco’s average asking price is the highest of any market studied by RealtyHop at $1.38 million. The average household income in San Francisco is $96,265, with the average mortgages being $6,267. 

Freemont, California had the highest median income at $122,191. Freemont came in at No. 16 most expensive market on the list, with an average home price of $992, 475. 

Making its debut on the list, Boston saw an increase in median home sale prices to $729,000. 

On the other side of the spectrum, Detroit, Michigan, is the most affordable market in the nation. The average home price in Detroit is just $50,000 with an average household income of $27,838. Households need to spend just 13.04% of their income to own a home. 

The average mortgage payment in Detroit is just $302.42.

Following Detroit was Fort Wayne, Indiana; Wichita, Kansas; Cleveland, Ohio; and Bakersfield, California. Bakersfield made the ranking for most affordable markets for the first time, as a drop in home-sale prices caused the affordability index to drop 7.7% since last month. 

Home prices will continue to impact affordability, as CoreLogic’s latest Home Price Index [2]revealed home prices rose 3.6% annually in July. Just two states—South Dakota and Connecticut—reported declines in home prices. 

July's HPI gain was down annually from 2018's 5.8% gain. July's increase was also a slight increase over June's 3.3%.