It’s more difficult than ever to afford a home, according to a recent Redfin report focused on the least and most affordable cities in the U.S.
Discover: 7 Safest and Cheapest Cities to Live in Florida
Learn: What To Do If You Owe Back Taxes to the IRS
According to the report, in 2023, someone making the median U.S. income of $78,642 would’ve had to put 41.4% of their earnings toward monthly mortgage payments on a $408,806 median-priced U.S. home.
That’s the highest share it’s ever been, and an increase from 38.7% in 2022. For reference, many personal finance experts support adhering to the 28% rule — spending no more than 28% of your gross monthly income on housing costs.
Here’s a look at the least and most affordable U.S. cities — plus, a realtor’s take on where homes might become more affordable in 2024.
5 Least Affordable Cities
Here are the five least affordable cities in 2023, according to the Redfin report.
Anaheim, California
- Share of income spent on monthly housing costs: 88.3%
- Median monthly housing payment for homebuyers: $6,794
- Median estimated household income: $92,306
- Median home sale price: $1,022,075
- Change in median home sale price from 2022-2023: 3.1%
San Francisco, California
- Share of income spent on monthly housing costs: 85.4%
- Median monthly housing payment for homebuyers: $9.597
- Median estimated household income: $134,815
- Median home sale price: $1,444,700
- Change in median home sale price from 2022-2023: -3.5%
Grant Cardone: These Will Be the Top Places To Buy Real Estate Over the Next Decade
San Jose, California
- Share of income spent on monthly housing costs: 73.0%
- Median monthly housing payment for homebuyers: $9,528
- Median estimated household income: $156,643
- Median home sale price: $1,433,625
- Change in median home sale price from 2022-2023: 0.7%
Los Angeles, California
- Share of income spent on monthly housing costs: 72.9%
- Median monthly housing payment for homebuyers: $5,611
- Median estimated household income: $92,306
- Median home sale price: $844,500
- Change in median home sale price from 2022-2023: –1.0%
San Diego, California
- Share of income spent on monthly housing costs: 64.6%
- Median monthly housing payment for homebuyers: $5,604
- Median estimated household income: $104,072
- Median home sale price: $843,450
- Change in median home sale price from 2022-2023: 3.2%
5 Most Affordable Cities
Here are the most affordable cities, according to the report. All five have lower median home sale prices than anywhere else in the U.S. and, at less than $300,000, they are also much lower than the $408,806 median-priced U.S. home.
Detroit, Michigan
- Share of income spent on monthly housing costs: 18.5%
- Median monthly housing payment for homebuyers: $1,155
- Median estimated household income: $74,971
- Median home sale price: $173,785
- Change in median home sale price from 2022-2023: -2.6%
Pittsburgh, Pennsylvania
- Share of income spent on monthly housing costs: 23.5%
- Median monthly housing payment for homebuyers: $1,456
- Median estimated household income: $74,279
- Median home sale price: $218,973
- Change in median home sale price from 2022-2023: 1.5%
Cleveland, Ohio
- Share of income spent on monthly housing costs: 23.8%
- Median monthly housing payment for homebuyers: $1,362
- Median estimated household income: $68,588
- Median home sale price: $204,773
- Change in median home sale price from 2022-2023: 2.4%
Philadelphia, Pennsylvania
- Share of income spent on monthly housing costs: 23.9%
- Median monthly housing payment for homebuyers: $1,761
- Median estimated household income: $88,497
- Median home sale price: $265,100
- Change in median home sale price from 2022-2023: -1.0%
St. Louis, Missouri
- Share of income spent on monthly housing costs: 25.2%
- Median monthly housing payment for homebuyers: $1,647
- Median estimated household income: $78,407
- Median home sale price: $247,852
- Change in median home sale price from 2022-2023: 4.1%
Where Might Homes Become More Affordable in 2024?
Joy Aumann, a licensed realtor (CIPS) and co-founder of La Jolla Life, said that Redfin’s assessment of Detroit, Pittsburgh, Cleveland, Philadelphia and St. Louis as the most affordable housing markets makes perfect sense to her.
“As someone who sells million-dollar homes in LA, I can tell you those median prices under $300k seem like a steal,” she said. “In my professional opinion, these already budget-friendly cities will get even more affordable in 2024 as mortgage rates decline while more homes hit the market. Buyers in these Midwest spots should see the biggest benefits.”
Aumann said that Pittsburgh and Cleveland, in particular, stand out to her as markets poised for improved affordability. She also shared the following: “Strong local economies are attracting new residents, yet aging housing stock and declining populations limit price surges in cities like Detroit and St. Louis.”
Aumann suggested, “for buyers tired of the insane prices here in SoCal, these overlooked Midwest cities might be a smart move in 2024. Saving on monthly costs thanks to lower rates and more options sure sounds nice!”
More From GOBankingRates
- Zelle Scams on Facebook Marketplace: How To Recognize and Avoid Them
- I Grew Up Poor: Here Are 8 Things I Never Waste Money On
- Experts: Make These 7 Money Resolutions If You Want To Become Rich on an Average Salary
- The 7 Worst Things You Can Do If You Owe the IRS
This article originally appeared on GOBankingRates.com: Housing Market 2023: America’s Most and Least Affordable Cities
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
