Home price growth has chilled following an accelerated climb in recent years, but that doesn't mean they're not still on the rise. Higher property values continue challenging homebuyer affordability, especially with strong demand for a low supply of housing.
But consumers who consider a purchase in certain key cities will have an upper hand.
In the nation's most costly market, San Francisco, a buyer would need to earn 286% of the local median income to afford a median-priced home. But there are other cities where the median home price is less than half the area's typical income.
"People who live in places like Detroit, Pittsburgh and Cleveland tend to earn lower salaries than people in expensive coastal areas, but in many ways the Midwesterners’ quality of life is better. Even though they may make less money, it’s easier to purchase a home and build equity while providing for a family," Daryl Fairweather, Redfin's chief economist, said in a press release.
"It’s no secret there’s an affordability crisis in high-priced places like the Bay Area, where modest homes can sell for well over $1 million. But in most of the country, homes are still affordable on the typical local income. That’s one reason people are looking to move to places like Phoenix, Atlanta and Las Vegas, where homes are affordable on realistic incomes," he said.
Here's a look at 12 of the nation's most affordable housing markets, based on the lowest shares of median local income needed to buy a house.
The data for the rankings is derived from a Redfin report analyzing median home prices and local incomes across the country's 88 most populous metropolitan areas.
In the report, household income is based on 2017 figures, while median home sale prices are based off of July 2019 data. Median monthly mortgage payment amounts include taxes.