• Miami homeowners allocate 81 percent of their income for mortgage and property taxes, based on the August Miami Metro Affordability Report.
• The city has also been identified as the least affordable housing market within the Miami Metro Area, culminating in an exodus of low-income earners from the region.
• Over the past year, Miami’s home costs surged by 6.7 percent, ranking second nationally in price spikes.

Miami homeowners are allocating 81 percent of their income to cover mortgage and property tax expenses, as per the latest Miami Metro Affordability Report for August.

The report, based on data analysis and insights from the RealtyHop Affordability Index, indicates that Miami has the distinction of being the least affordable housing market within the Miami Metro Area, which encompasses Miami-Dade, Broward, and Palm Beach counties.

In the past year, Miami’s real estate market has experienced the second-highest price increases nationally with a 6.7 percent gain, as reported by Black Knight, a mortgage data and analytics company. Recent data also points to a convergence of Miami’s home price growth with the national average.

In terms of affordability, data also shows that Miami remains one of the least affordable places to live in the nation – determined by comparing home prices with income levels, ranking 5th worst overall, as home prices continue to climb while paychecks remain stagnant.

“While elevated interest rates continue to weigh on both affordability and demand, they’re simultaneously constricting supply as well as would-be sellers who locked in ultra-low rates early in the pandemic continue to sit on the sidelines,” says Andy Walden, VP of enterprise research strategy for Black Knight.

The overall lack of affordability is also presenting itself in the form of delinquent mortgages and foreclosures. Florida ranked 18th nationally in non-current mortgage percentage, with 4.1 percent of all mortgages either falling behind or in active foreclosure — slightly higher than the 3.8 percent national average.

Recent census estimates reveal that Miami-Dade and Broward counties lost residents in the last three years, with a drop of 1.4 percent and 0.4 percent respectively, whereas Palm Beach County’s population rose by 1.4 percent, with housing affordability playing a key role.

In Miami-Dade County, the median price of homes sold in the first quarter of 2023 reached $460,000, with a median family income of $73,100. This pricing puts less than 17 percent of homes within reach for typical families, according to the National Association of Home Builders and Wells Fargo Housing Opportunity Index.

A shift in demographics is also evident. IRS data shows that newcomers to Miami-Dade County had average gross incomes of over $220,000, while those leaving the county had incomes below $50,000.

Nationally, it currently takes 34.2 percent of the median household income to make principal and interest payments on the median-priced home purchased with 20 percent down using a 30-year fixed-rate mortgage. Black Knight, however, reported that Freddie Mac’s latest average 30-year rate of 6.79 percent will push the average new homeowner’s payment to-income-ratio above 35 percent.

The rising cost of homes and persisting low inventories could lead to an economic stalemate. Concerns also arise over South Florida’s job growth, which, although strong at 3 percent from June 2022 to June 2023, lags behind other areas like Orlando, Tampa, and Jacksonville.