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The past year has been filled with plenty of highs and lows, no matter your perspective. And housing was no different, closing out 2019 with a mixed scorecard.
Home prices are still high, and a severe housing shortage still grips the nation. But the economy is strong and lower mortgage rates have made it easier for many would-be buyers to get into the market, according to a recent realtor.com® report. It just depends on which market.
“The big takeaway is, it was a somewhat disappointing year for housing,” says Javier Vivas, director of economic research at realtor.com. “The low mortgage rates should have propelled home sales much higher than we saw. [But] prices just got to levels that were just too high for buyers.”
So what are buyers to do? Well, they may want to head to one of the most affordable housing markets in the nation. The financially savvy probably want to get into places where their home’s value is sure to grow fast. Maybe they’re still figuring out whether it’s better to rent or buy. Or they may want to join their peers and buy in a millennial mecca, Gen X hot spot, or boomer boomtown.
Don’t worry. We’ve got you covered.
The 10 most affordable housing markets
With sky-high home prices just about everywhere buyers turn, the hottest property is a budget-friendly home. That’s why we found the 10 most affordable housing markets for local buyers in the 100 largest metropolitan areas. (Metros include the main city and surrounding town, suburbs, and smaller cities.) To come up with our list, we factored in the median household incomes for these metros.
Not surprisingly, these are far from the biggest, most expensive coastal cities. Many of these places are former manufacturing hubs that have struggled economically and with higher unemployment. And they tend to be in the Rust Belt and Midwest, where prices are the lowest.
“These are smaller, more remote areas, and they are the last affordable pockets in the country,” says Vivas. “They’re latecomers to the economic boom.”
In Youngstown, OH, the most affordable metro in the nation, about 67% of locals can afford a median-priced home there of $120,050 as of Nov. 1, according to realtor.com listing data. It was followed by Akron, OH, at 63%, with a median list price of $157,050; Dayton, OH, at 61% and $167,950; Toledo, OH, at 60% and $154,950; Allentown, PA, at 59% and $243,050; St. Louis, at 59% and $219,950; Scranton PA, at 59% and $160,050; Pittsburgh, at 56% and $195,050; Des Moines, IA, at 56% and $259,950; and Syracuse, NY, at 55% and $179,950.
10 most affordable metros
- Youngstown, OH
- Akron, OH
- Dayton, OH
- Toledo, OH
- Allentown, PA
- St. Louis, MO
- Scranton, PA
- Pittsburgh, PA (tied)
- Des Moines, IA (tied)
- Syracuse, NY
Where prices are rising the most
Buyers in these markets will want to act fast—before they’re priced out. The metros with the highest appreciation are still relatively affordable (although not for long!) and are often alternatives to more expensive, biggest cities. They tend to have growing economies, luring new residents. In other words, they’re generally a good investment.
We identified these markets by looking at the year-over-year change in median sales prices.
One of our top metros, Boise, ID, is popular with young professionals and tech professionals fleeing the high cost of living in nearby California. The emerging tech hub is appealing due to its good-paying jobs as well as the many outdoorsy activities, cultural amenities, and innovative places to grab a cocktail and dinner.
“They’re lower-priced, and you’re buying into a place … [where] more people are moving into the area,” says Vivas. “This year we saw an expansion of [smaller, nearby] cities absorbing buyers who were priced out of the overheated, higher-cost markets.”
In Boise, prices rose 10.1%, to hit a median list price of $365,040 as of Nov. 1, according to realtor.com data. It was tied with Syracuse, NY, up 10.1%, to $179,950. They were followed by Youngstown, OH, up 9.5%, to $120,050; Indianapolis, up 9.3%, to $259,950; Greensboro, NC, up 9%, to $264,950; Minneapolis, up 8.9%, to $343,040; Cincinnati, up 8.8%, to $260,050; Knoxville, TN, up 8.5%, to $284,950; Louisville, KY, up 8.1%, to $244,950; and Spokane, WA, up 3.4%, to $349,950.
10 fastest-appreciating housing markets
- Boise, ID
- Syracuse, NY
- Youngstown, OH
- Indianapolis
- Greensboro, NC
- Minneapolis
- Cincinnati
- Knoxville, TN
- Louisville, KY
- Spokane, WA
Best places to rent—and the best places to buy
The big question on many folks’ minds is whether it’s financially better to continue renting—or take the plunge and buy a home. So we found the counties where it’s cheapest for locals making the median income to rent or purchase their abode. Not surprisingly, it makes the most sense to rent in priciest parts of the nation. And buying is best in the cheapest parts of the country, although there aren’t as many good-paying jobs.
The best places to rent are the overheated markets, says Vivas.
“Price points are out of reach. In most of them, you have to be in the top 10% of incomes to afford the typical house,” he says, adding that the best places to buy “have weaker economies compared to the rest of the country and demand for homes is lower.”
10 best counties to rent a home
- New York County, NY (Manhattan), $1,600,050 (median county home list price)
- Kings County, NY (Brooklyn), $825,050
- Santa Barbara County, CA, $1,389,050
- Monterey County, CA, $1,050,050
- Santa Cruz County, CA, $950,050
- Marin County, CA, $1,475,050
- San Mateo County, CA, $1,499,950
- San Francisco County, CA, $1,495,050
- Napa County, CA, $979,050
- Suffolk County, MA (Boston), $809,050
10 best counties to buy a home
- Clayton County, GA, $158,050 (median county home list price)
- Richmond County, GA, $125,050
- Baltimore City, MD, $174,950
- Cumberland County, NJ, $145,050
- Vigo County, IN, $92,550
- Muscogee County, GA, $159,950
- Hampton City County, VA, $195,050
- Wayne County, MI (Detroit), $130,050
- Fayette County, PA, $144,950
- Schuylkill County, PA, $99,050
Top millennial markets
The top markets for the millennial set aren’t the more glamorous, trendy cities on the higher-priced coasts boasting the best music festivals and hottest restaurants and bars. Instead, they’re smaller, more affordable metros with lots of good jobs. A lot of them, such as Grand Rapids, MI, which topped our list, are also college towns boasting a popular beer brewing culture as well.
To find where millennials are heading, we looked at the metros where millennials took out the most purchase mortgages in the third quarter of 2018 and 2019.
- Grand Rapids, MI, $279,950 (median list price)
- Salt Lake City, UT, $439,050
- Scranton, PA, $160,050
- Madison, WI, $348,850
- Colorado Springs, CO, $435,050
- Allentown, PA, $243,050
- Rochester, NY, $202,950
- Portland, ME, $385,050
- Providence, RI, $375,050
- Minneapolis, MN, $343,040
Top Generation X markets
Gen Xers are often (but certainly not always) less concerned with the local beer and music scene and more worried about good school districts. These folks are typically making more money than the millennials, so they can afford to spend more on a home. But they often need more space for their families, the kids, and/or their aging parents. And they’re looking more in the suburbs.
The top picks for Gen Xers are not necessarily cheap, as they have stronger economies, Vivas says. But they do have relatively good affordability when it comes to square footage.
- Memphis, TN, $234,950 (median list price)
- Los Angeles, CA, $859,050
- Bridgeport, CT, $699,050
- Lakeland, FL, $230,050
- Louisville, KY, $244,950
- Raleigh, NC, $359,950
- Knoxville, TN, $284,950
- Stockton, CA, $435,050
- McAllen, TX, $197,550
- San Jose, CA, $1,099,050
Top baby boomer markets
Baby boomers are often less concerned with thriving job markets and living in huge houses (as hopefully their children have flown the coop). They often want to live in warmer climates with top-notch health care facilities where their dollars will stretch.
That’s why almost all the metros on this list offer good value, says Vivas.
- Tucson, AZ, $287,650 (median list price)
- Cape Coral, FL, $310,050
- Albuquerque, NM, $269,950
- Spokane, WA, $349,950
- Greenville, SC, $269,950
- Dayton, OH, $167,950
- Akron, OH, $157,050
- North Port, FL, $365,900
- Deltona, FL, $284,550
- Honolulu, HI, $669,050
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