The U.S. housing market has taken a wild ride since early 2020, driven by low mortgage rates and the COVID-19 pandemic. Many people who could work from home relocated to cities they favored, and mortgage rates at 3% helped them afford houses as they moved. The migration mostly helped prices in cities in the South. According to S&P Case-Shiller, home prices in Tampa, Miami and Phoenix jumped as much as 30% month over the same month a year ago for almost two years. That ended almost a year ago, as mortgage rates reached as high as 6%, driven by the Federal Reserve’s war on inflation, which included raising rates aggressively.
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Home prices have stopped rising in most markets. In some, prices have begun to tail off. Fewer people have homes on the market because, in most cases, they do not think they can fetch premium prices. As has been the case during the housing run-up and drop-off, some metros are much better to live in than others if home prices are a primary measure. (These are the U.S. cities where home prices are the cheapest.)
Lending Tree’s study behind its “Best — and Worst — Large Metros for Homeownership” report looked at the 50 largest housing markets through the lens of several data points:
- Five-year median home value appreciation
- Median household income for owner-occupied homes
- Homeownership rate
- Median annual taxes for owner-occupied homes
- Median ratio of housing costs to household income for owner-occupied homes
- Share of occupied households with one or fewer occupants per room
- Share of occupied households without complete plumbing facilities
- Share of occupied households without complete kitchen facilities
- Share of occupied households with no phone service available
Data were collected from the U.S. Census Bureau American Community Survey.
Based on the screen, the worst city to own a home is Los Angeles. Home value appreciation in the country’s second-largest city was only 24% over the past five years. In several other cities, that number is over 40%. The Los Angeles homeownership rate is 49%, while in some cities the figure is over 70%.
Most of the worst cities to own a home are huge, and four of the worst 10 are in California. Besides Los Angeles, they are San Francisco, Riverside and San Jose. Others making the list include Miami, Houston, Philadelphia and New York City.
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