Housing affordability in America is finally improving. Not so much in these cities

With the Federal Reserve all but confirmed to cut interest rates next month, there is finally some light at the end of the tunnel for Americans grappling with the most unaffordable housing market in decades. But the old saying that “real estate is local” still rings painfully true.

With the Federal Reserve all but confirmed to cut interest rates next month, there is finally some light at the end of the tunnel for Americans grappling with the most unaffordable housing market in decades. But the old saying that “real estate is local” still rings painfully true. In June, home-price growth accelerated the most in New York, San Diego and Las Vegas, according to the latest S&P CoreLogic Case-Shiller 20-City Home Price Index released Tuesday. For several months, San Diego led with the fastest increase in home prices, eventually getting toppled by New York in May — a corner of the country already notorious for its high cost of living. And it’s not just home buyers feeling the sting: A recent report from Moody’s Analytics showed that the situation is dire for renters, too. New York City, Miami and Fort Lauderdale in Florida, Los Angeles and Northern New Jersey were the five most rent-burdened places in America during the second quarter, the report found, based on rent prices and family incomes (or the rent-to-income ratio.) Renters in those cities allocate more than 30% of their income toward rent, Moody’s said. That’s in contrast to regions seeing declining shelter costs, such as Tampa, Florida; Denver and Minneapolis, according to Consumer Price Index data. A pickup in home construction has been key for those metropolitan areas because it can ease upward pressure on prices. An influx of new residents drove up housing costs in the Tampa Bay region, leaving it with one of the highest annual inflation rates in the country last year. Now, the Tampa metro has one of the lowest rates, mostly thanks to beefed-up housing supply. Nationwide, the housing market has finally shown signs of improvement. Year-over-year home-price growth has slowed over the past several months, as measured by the national Case-Shiller index, rising 5.4% in June from a year earlier, down from 5.9% in May, though the index itself reached a fresh record high that month. The average 30-year mortgage rate is currently at its lowest level since May 2023, housing inventory has expanded every month this year so far, and household incomes have continued to grow at a brisk pace, which is factored in to housing affordability, Affordability is being stymied for different reasons across different places, but the one region currently taking the crown as America’s most unaffordable housing market seems to be New York.