Realtor.com Tool Shows Housing Affordability by ZIP Code

Realtor.com has launched a new tool designed to help homebuyers understand housing affordability at a granular, ZIP code level. Developed by the Realtor.com® economic research team, this tool analyzes estimated property values for over 100 million homes nationwide to determine the percentage of listings within specific price ranges that are attainable for buyers. The tool aims to make the home search process more efficient by allowing prospective buyers to target neighborhoods where their budget aligns with local home prices.

A common guideline for setting a home budget suggests that a home's price should not exceed three to five times a buyer's annual income, assuming no significant cash reserves from a prior sale. For instance, a family earning the median household income of $83,700 could conservatively afford a home priced around $250,000, or more aggressively, up to $418,000. These figures are influenced by factors such as the down payment amount, existing debt obligations, and prevailing mortgage interest rates.

Nationally, the Realtor.com analysis indicates that 28% of existing homes would be accessible to buyers with a $250,000 budget. This figure increases to 58% for buyers who can afford to spend $418,000. However, home values exhibit substantial geographical variation. A buyer with a $250,000 budget will encounter significantly more options in states like Ohio compared to California. Even within the same metropolitan area, housing costs can differ considerably from one neighborhood to another, underscoring the utility of the new ZIP code-specific mapping tool.

The analysis encompasses price points ranging from $100,000, representing 3% of national listings, to $10 million, which accounts for 99.9% of listings. For example, in New York City, where the median home price is approximately $800,000, only 1% of homes in the Battery Park City ZIP code would be affordable at that price. Conversely, in certain areas of Staten Island and the Bronx, a much higher percentage of homes might fall within that budget. The tool provides a detailed view, enabling buyers to see how their budget translates into purchasing power across different ZIP codes.