The real estate housing market in the United States is a unique position we haven’t seen in quite some time. Airdeed Homes research shows four of the top five counties in the nation with the highest median home values are located in California and the final one is in Massachusetts. Mortgage rates have increased by nearly 3 percentage points since this time last year, this in combination with home prices increasing in many counties by more than 30 percent has been a housing affordability trainwreck.

Cities with particularly high housing shortages include Miami, San Diego, Los Angeles, Honolulu, Seattle, and New York. As the demand for housing continues to surge in these areas, many of them are struggling to keep up with the growing demand. This is in direct contrast to other major cities around the United States that have a sufficient supply of housing. These cities include Jacksonville, Pensacola, Chattanooga, Boise, and Myrtle Beach. However, the majority of metro areas are in the shortage categories for existing home supply and new construction.

Real Estate Market Affordability By State
State	Most To Least Affordable
Ohio	0.96
West Virginia	0.93
Iowa	0.92
Indiana	0.90
Illinois	0.89
Kansas	0.88
North Dakota	0.88
Michigan	0.87
Pennsylvania	0.86
Maryland	0.85
Missouri	0.84
Oklahoma	0.81
Minnesota	0.79
Arkansas	0.78
Kentucky	0.78
Louisiana	0.77
District of Columbia	0.74
Virginia	0.74
Alabama	0.73
Alaska	0.72
Mississippi	0.72
Nebraska	0.72
Wisconsin	0.70
South Carolina	0.67
Maine	0.66
New Jersey	0.66
Connecticut	0.63
Georgia	0.63
Delaware	0.62
South Dakota	0.61
Wyoming	0.61
Texas	0.60
New Mexico	0.59
North Carolina	0.59
Vermont	0.57
New Hampshire	0.56
Tennessee	0.55
New York	0.54
Colorado	0.53
Massachusetts	0.53
Nevada	0.51
Arizona	0.49
Florida	0.48
Rhode Island	0.48
Utah	0.48
Washington	0.48
California	0.46
Hawaii	0.45
Oregon	0.45
Idaho	0.40
Montana	0.40

Source: NAR

Ohio, West Virginia, Iowa, Indiana, and Illinois are some of the most affordable states for buying a house. All five states have a median home price that is below the national median, making them attractive to potential homebuyers. In Ohio, for example, the median home price is close to $213,000, while the median household income is $62,689 according to the St Louis Fed.

Additionally, affordability is not limited to the median income, as all five states have a wide range of housing prices that are accessible to people of all income levels. Furthermore, these states have a large selection of active inventory, meaning that there are plenty of homes currently available for sale. This makes it easier for buyers to find a home that fits their budget and needs. All in all, these five states offer a great opportunity for those looking to purchase a home.

Montana, Idaho, Hawaii, Oregon, and California are the least affordable states for buying a house. These states have some of the highest median home prices in the country, making them difficult to afford for many people. In California, for example, the median home price is close to $680,000, while the median household income is $81,575 according to the St Louis Fed. For individuals with lower incomes, the cost of living in these states is often too high compared to their income levels to make buying a home feasible.

Furthermore, the active inventory of homes available for sale in these states is often limited as we saw in the above chart about the housing supply being insufficient in many of these states. This makes it even more difficult to find a home that fits within a budget. For those looking to buy a home in these states, it is important to consider all of the costs associated with buying a home, including taxes, insurance, and closing costs, in order to ensure that the purchase is affordable.

Top 100 Metro Areas By Population

Source: NAR

Real Estate Market Existing Home Sales Affordability By Metro
Metro Area	Least To Most Affordable
Los Angeles-Long Beach CA	0.3
San Diego-Carlsbad, CA	0.3
Oxnard-Thousand Oaks-Ventura, CA	0.4
Riverside, CA	0.4
Miami-Fort Lauderdale, FL	0.4
Stockton-Lodi, CA	0.4
Seattle-Tacoma-Bellevue, WA	0.5
Austin-Round Rock, TX	0.5
Honolulu, HI	0.5
Cape Coral-Fort Myers, FL	0.5
Sacramento–Roseville, CA	0.5
Lakeland-Winter Haven, FL	0.5
Spokane-Spokane Valley, WA	0.5
Deltona-Daytona Beach, FL	0.5
Colorado Springs, CO	0.5
Fresno, CA	0.5
Providence-Warwick, RI-MA	0.5
Portland-South Portland, ME	0.5
Portland-Vancouver, OR-WA	0.5
Tampa-St. Petersburg et al, FL	0.5
Salt Lake City, UT	0.5
Nashville-Davidson et al, TN	0.5
El Paso, TX	0.5
Orlando-Kissimmee-Sanford, FL	0.5
New York-Newark, NY-NJ-PA	0.5
North Port-Sarasota, FL	0.5
Boston-Cambridge-Newton, MA-NH	0.5
Phoenix-Mesa-Scottsdale, AZ	0.5
Las Vegas-Henderson-Paradise, NV	0.5
San Jose-Sunnyvale, CA	0.5
Boise City, ID	0.5
Dallas-Fort Worth-Arlington, TX	0.5
McAllen-Edinburg-Mission, TX	0.5
Bridgeport-Stamford-Norwalk, CT	0.5
Charleston-North Charleston, SC	0.5
Bakersfield, CA	0.5
Knoxville, TN	0.6
San Francisco-Oakland, CA	0.6
San Antonio-New Braunfels, TX	0.6
Albuquerque, NM	0.6
Denver-Aurora-Lakewood, CO	0.6
Durham-Chapel Hill, NC	0.6
Palm Bay-Melbourne, FL	0.6
Tucson, AZ	0.6
Chattanooga, TN-GA	0.6
Jacksonville, FL	0.6
Grand Rapids-Wyoming, MI	0.6
Houston-The Woodlands et al, TX	0.6
Omaha-Council Bluffs, NE-IA	0.6
Madison, WI	0.7
Worcester, MA-CT	0.7
Charlotte-Concord et al, NC-SC	0.7
Atlanta-Sandy Springs et al, GA	0.7
Raleigh, NC	0.7
Greenville-Anderson-Mauldin, SC	0.7
Winston-Salem, NC	0.7
New Orleans-Metairie, LA	0.7
Springfield, MA	0.7
New Haven-Milford, CT	0.7
Greensboro-High Point, NC	0.7
Allentown-Bethlehem, PA-NJ	0.7
Milwaukee-Waukesha, WI	0.7
Virginia Beach, VA	0.7
Augusta-Richmond County, GA-SC	0.7
Columbia, SC	0.7
Kansas City, MO-KS	0.7
Hartford-West Hartford, CT	0.7
Oklahoma City, OK	0.8
Albany-Schenectady-Troy, NY	0.8
Des Moines-West Des Moines, IA	0.8
Minneapolis, MN-WI	0.8
Tulsa, OK	0.8
Washington, DC-VA-MD-WV	0.8
Jackson, MS	0.8
Baton Rouge, LA	0.8
Columbus, OH	0.8
Wichita, KS	0.8
Cincinnati, OH-KY-IN	0.8
Little Rock, AR	0.8
Chicago, IL-IN-WI	0.8
Memphis, TN-MS-AR	0.8
Harrisburg-Carlisle, PA	0.8
Buffalo-Cheektowaga, NY	0.8
Philadelphia, PA-NJ-DE-MD	0.8
Louisville, KY-IN	0.9
Scranton–Wilkes-Barre, PA	0.9
Syracuse, NY	0.9
Indianapolis-Carmel-Anderson, IN	0.9
Birmingham-Hoover, AL	0.9
Rochester, NY	0.9
Detroit-Warren-Dearborn, MI	0.9
Baltimore-Columbia-Towson, MD	0.9
Cleveland-Elyria, OH	1.0
St. Louis, MO-IL	1.0
Pittsburgh, PA	1.0
Dayton, OH	1.0
Akron, OH	1.0
Youngstown-Warren et al, OH-PA	1.1
Toledo, OH	1.1

According to data from NAR in the table above, the least affordable real estate metro areas in the country are Los Angeles, San Diego, Riverside, and Miami. All have affordability scores below .4. A score of 1 or higher suggests a market that is affordable. This considers affordability for all income percentiles, not just the median income.

These scores indicate that these markets are unaffordable for all income percentiles. This is a reflection of the high cost of living in these areas, driven by factors such as limited housing supply, high demand, and high taxes. Other metro areas in the top 10 least affordable home metropolitan areas include Seattle, Austin, Honolulu, and Cape Coral.

The most affordable metro real estate markets for home sales in the United States are Toledo, Akron, Dayton, Pittsburgh, and St. Louis, each with an affordability score of 1 or higher. This score indicates that each of these areas offers homes at a price that is affordable to all income levels, not just the median income.

Youngstown and Akron are especially attractive for those looking for low-cost housing, with affordability scores above 1. Each of these areas offers affordable housing, making them attractive options for those looking for a place to call home. Not surprisingly we see three metro areas in Ohio in the top 5 most affordable list as Ohio ranked as the most affordable state in the first data chart.

Source: NAR

To get a market prediction we first have to look at this first chart, we start to see an issue with the supply of housing in a majority of the metro areas. This is important because, with the increased interest rates over the past year, we would expect housing prices to drop significantly. While we have seen drops around the United States we haven’t seen the major “housing bubble” type of drop. So the outlook should be positive because when there is typically a limited supply of housing, the prices shot up and appreciation is massive. This normally would be great for the residential real estate market.

However, we have a few large black clouds lurking over the real estate market for 2023. The first is the increasing possibility of a global recession due to many factors including but not limited to the Ukraine-Russia War and sky-high inflation. These factors make the likelihood of a recession even more likely which would see a housing price correction. In many cities around the United States, we have already seen a slight housing correction and this is primarily due to the second reason which is high-interest rates.

Our two charts above show the correlation between the number of listings going up and the prices of homes going down. This is a key indicator to watch for. If active listings go up to pre-pandemic levels in 2023, we could see a major price correction as we have already started seeing prices drop over the past six months due to interest rates. High-Interest rates and higher active listings could cause a major price correction. Home sales would be affected in a negative way by a possible housing market crash.

Interest Rates Chart
Product	Interest rate	APR
30-year fixed-rate	6.109%	6.222%
20-year fixed-rate	5.730%	5.876%
15-year fixed-rate	5.094%	5.261%
10-year fixed-rate	4.888%	5.058%
7-year ARM	6.017%	6.680%
5-year ARM	5.708%	6.642%
3-year ARM	2.340%	3.371%
30-year fixed-rate FHA	5.438%	6.215%
30-year fixed-rate VA	5.523%	5.616%

Data Source: Nerd Wallet

Current interest rates remain high according to Freddie Mac’s Primary Mortgage Market Survey. The 30-year fixed-rate mortgage currently stands at 6.109%, with an APR of 6.222%. The 15-year fixed-rate mortgage is lower at 5.094%, with an APR of 5.261%. Veterans can take advantage of the 30-year fixed-rate VA mortgage, which is at 5.523% with an APR of 5.616%. For those looking to refinance a home, now may not be the best time to take action while rates remain high.

While interest rates have dropped over the past few months due to the fear of a global recession, they are still almost double what was available last year. This may or may not be a factor to consider when you are buying a home because of the chance to refinance in a year or two to a much lower rate if interest rates return to the sub-4 % level that many predict.

Remember that home insurance prices have also started to jump in many parts of the United States. This is especially an issue in Florida due to the weather that the state has to deal with. So please take these costs into consideration when buying a home in addition to not taking out any new personal loans during the mortgage loan process.

While the U.S. housing market is in a very vulnerable position due to the global recession fear, high inflation, low supply, and high-interest rates, a housing crash isn’t expected by any expert according to Forbes. Many feel that the housing market will continue to contract in 2023 but avoid a full housing crash. These are good market predictions for real estate sellers.

According to our home prices data, the most expensive metro housing markets in the U.S. are Los Angeles, San Diego, Oxnard, Riverside, and Miami. With the highest housing market county as San Mateo COunty. In addition, see the NAR chart below with the highest median home values:

No, these AI platforms cannot provide the most up-to-date prices for the housing market and also can’t provide accurate estimates. The data feed into the system stopped in 2021 so it will give outdated home value information. However, sometimes it will say it is giving you up-to-date home price data and even provide a source URL if you ask for one but this URL won’t work.

Going to that URL will give you a 404 error page stating that it doesn’t exist.

After questioning ChatGPT further it gave the honest answer that even though it said it got the data for January 2023 from Realtor.com, in fact, it was its own estimation.

If you’re a real estate investor investing at this time may not be the best choice but there are still several locations around the U.S. that have become buying opportunities. You won’t find these in many of the major metro areas but instead in the metro areas outside the top 50. In addition, if you are a cash investor you don’t have to worry about the high-interest rates which have scared off a lot of real estate investors. For investors needing to access private money lending to secure deals, I would wait and look for the second half of 2023 until you start jumping into home small business life.