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Affordability Challenges Hamper East, West Coasts

A new report by Realty Hop found affordability is not common on the east and west coasts, as those markets dominated the top-5 least affordable areas in the nation. 

The report found Los Angeles, California, to be the least affordable metro in the nation, as it requires 91.4% of the homebuyers income to afford a home. Miami, Florida, was a close second at 87.8%, and was followed by New York, New York (85.3%), San Francisco, California (73.8%), and Oakland, California (68.1%). 

Los Angeles saw a 1.44% increase in its homeownership burden, and home prices jumped to an average of $899,000. Los Angeles is also home to the fifth-highest estimated mortgage payment of $4,151. 

San Francisco had both the highest average home price ($1.29 million) and the highest estimated mortgage payment of $5,921.

Detroit, Michigan, is still the most affordable metro in the nation, requiring just 13% of the homebuyers income to afford a home. Mortgage payments in Detroit are estimated at just $301.

Detroit was followed by Fort Wayne, Indiane (17%), Wichita, Kansas (18.3%), Cleveland, Ohio (19%), and Indianapolis, Indiana (21.6%). Fort Wayne, though, did see an increase of 6.5% in homeownership burden, as the average home price rose to $134,900.

Louisville, Kentucky, had the largest jump in the ranking and became less affordable, rising eight spots from No. 91 to No. 83, with homeowners needing 25.1% of their income to afford a home. The biggest rise in affordability was recorded by Arlington, Texas, who fell 13 spots to No. 67 after home prices fell to $229,000, and its homeownership burden decreased 5.4% from May. 

Unisom’s 2019 Home Affordability Report found that it now takes 14 years for those making a median income to save for a 20% down payment on a median-price homes, meaning many prospective millennial homebuyers won’t achieve homeownership until their 40s.

The report states that the monthly payment needed to support a home purchase with a down payment of 20% grew by 12% between 2017 and 2018, far outpacing the growth of income during that period of 6%.

Unisom found that it takes prospective homebuyers in Los Angeles an average of 43 years to save the necessary 20% for a down payment on a median-priced home. Prospective homebuyers in Detroit have to wait just seven years, the shortest in the nation, to save the necessary 20%.

About Author: Mike Albanese

A graduate of the University of Alabama, Mike Albanese has worked for news publications since 2011 in Texas and Colorado. He has built a portfolio of more than 1,000 articles, covering city government, police and crime, business, sports, and is experienced in crafting engaging features and enterprise pieces. He spent time as the sports editor for the "Pilot Point Post-Signal," and has covered the DFW Metroplex for several years. He has also assisted with sports coverage and editing duties with the "Dallas Morning News" and "Denton Record-Chronicle" over the past several years.

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