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How Bad Are Housing Costs? Miami Ranks Second Most Unaffordable in US

Condominium towers in Downtown Miami.

Condominium towers in Downtown Miami. Photo: J. Albert Diaz/A;M

Here's a national ranking Miami won't be boasting about: The city is the second least affordable place to own a home.

Residents would have to pay most of their income — 86% compared with the 30% benchmark long used to denote affordability — to cover a mortgage and property taxes, a new report shows.

This doesn't mean all homeowners shell out this much. Instead, this applies to those with median income in a median-priced home.

Specifically, a resident who gets Miami's median income of $33,999 a year and buys the median-priced $499,000 home will spend $2,434 a month on mortgage and taxes, according to the April index released by home listings website RealtyHop, which also does market analyses.

Miami is second only to Los Angeles and followed by New York, San Francisco and Oakland, California.

The issue for Miami isn't so much home costs since the median is nearly half of the median price in San Francisco at $1.3 million, New York at $890,000 and Los Angeles at $875,000 of the 100 cities included in the study.

The issue in Miami stems from incomes not keeping up with home appreciation. The median income is the second lowest among the cities ranking in the 10 least affordable places. The only other city on the list with lower median income is nearby Hialeah at $31,012.

In Miami-Dade County, some of the biggest employers offer low-paying service jobs. A 2018 study by The Metropolitan Center at Florida International University listed leading occupations as retail salespeople, cashiers, registered nurses, secretaries, waiters and security guards. Of those, only nurses get paid at least 120% of the area's median income. The rest are 50% to 80% of the median.

The Metropolitan Center at FIU last year reported these as the 12 leading occupations in Miami-Dade County. Only registered nurses get 120% of the area median income. Credit: The Metropolitan Center

In Hialeah, a resident who buys the median-priced home pays 56%, or $1,439 a month, of the  median income to own a home, the RealtyHop data shows.

RealtyHop releases a monthly housing affordability index for the 100 most populous cities using home prices listed on its website to determine the median for each city, census data for median incomes  and local property tax data. To calculate a resident's mortgage, it assumes a 30-year mortgage at a 4.5% interest rate and a 20% down payment.

Other Florida cities in the rankings are Orlando, which is the 25th least affordable. Tampa, St. Petersburg and Jacksonville ranked 38th, 54th and 84th, respectively.