10 Most Affordable Cities To Buy A Home – Forbes Advisor

Throughout the country, the number of homes for sale continues to trail still-towering demand, which has driven up prices to exorbitant levels. Now, many would-be homebuyers must look outside their city or even state to find something affordable.

The median price for an existing home– $350,300 in January–has increased year-over-year for 119 consecutive months (nearly 10 years) through January 2022, according to the National Association of Realtors. Meanwhile, the total housing inventory dropped 16.5% during the same period.

As some people are less committed to their current location (in large part due to work-from-home flexibilities burgeoning during Covid-19), many are choosing to leave expensive areas in search of homes that won’t break the bank.

According to a recent Redfin report, in January, nearly one out of every three buyers on their website was house hunting in a different metro area from where they were currently located.

Forbes Advisor looked at the median listing price in the 100 largest metro areas (which includes the primary city and nearby suburbs, towns and smaller urban areas) to identify the top 10 most affordable cities to buy a home. Calculations also included the median down payment as a percentage of the total purchase price, per capita personal income and median property taxes.

Rust Belt Cities Top List of Most Affordable Housing

The region with the most affordable housing is in the Rust Belt—the midwest and northeast cities that once made up a thriving manufacturing behemoth, but have battled financial hardship since the 1980s. Now, these cities have emerged as an affordable housing mecca.

Cities like Youngstown, Toledo, and Akron, Ohio were among the most affordable areas with February median listing prices of $115,000, $128,400 and $147,450, respectively.

However, the Rust Belt may see housing prices increase down the road as large companies like Intel expand there. President Joe Biden noted Intel’s building of a $20 billion semiconductor plant in Columbus, Ohio during his State of the Union Address on March 1.

Investors have already taken notice of the low purchase prices and economic potential in many Rust Belt cities.

“Investors are definitely moving into Ohio and what that’s doing is creating a doughnut hole of affordable housing,” says Julie Heath, director of the University of Cincinnati Economics Center. “It’s good that our economy is starting to lift, but we still don’t have the supply we need.”

Ronald Black, a real estate agent for Keller Williams in Youngstown, says that motivated buyers shouldn’t wait much longer. Black has sold up to 60 homes to a single investor.

“There are investors who see houses for $60,000, $70,000, $80,000 and they think it’s cheap,” Black says. “They’re coming from expensive cities and buying up homes to rent them out.”

Top 10 Most Affordable Cities To Purchase a Home

The following is a list of the most affordable cities to purchase a home based on the median listing price as of Feb. 2022, according to Realtor.com.

Forbes Advisor also took into consideration the median down payment as a percentage of the median home price, according to third-quarter 2021 data from ATTOM Data Solutions; the U.S. Census Bureau’s income per capita in 2020; and the median property taxes paid in 2019 gathered by the Tax Foundation.

1. Youngstown, Ohio

Median listing price: $115,000
Median down payment as a percent of sale price: 4.5%
Per capita personal income (2020): $46,635
Median property taxes paid, by county (2019): $1,695

Youngstown, a city in Northeast Ohio, is number one on the list of most affordable cities to buy a house. The median listing price for a home was just $115,000 in February–that’s far less than the $350,300 median price of a home.

“Before the pandemic, the housing market in Youngstown was so stagnant,” Black says. “It wasn’t uncommon for homes to sit on the market for seven months—and now they’re going in days. The area needed a shot in the arm.”

Black is seeing a lot of younger buyers in their 20s and 30s moving back to Youngstown from bigger cities and buying homes. The desire for more space coupled with low-interest rates are primary drivers, which is a similar story across the country.

2. Toledo, Ohio

Median listing price: $128,400
Median down payment as a percent of sale price: 7%
Per capita personal income (2020): $51,024
Median property taxes paid, by county (2019): $2,354

Toledo, the fourth largest city in Ohio, had a median listing price of just $128,400. Toledo experienced a declining population, like much of Ohio, losing more than 16,000 residents over the last decade ending in 2020, according to the latest Census Bureau Data.

Despite the drop in population, Toledo ranked ninth in most popular areas for Gen Z renters, according to an analysis of more than three million rental applications by RentCafe. Toledo is home to the University of Toledo and nearby Bowling Green State. It’s also within 60 miles of more than 30 other higher education institutions.

3. Akron, Ohio

Median listing price: $147,450
Median down payment as a percent of sales price: 7.4%
Per capita personal income (2020): $56,821
Median property taxes paid, by county (2019): $2,586

Akron ranks as one of the top 10 most affordable housing markets for Black households, according to a recent report by the National Association of Realtors (NAR) and Realtor.com. Akron’s Black households can afford to buy homes “roughly in proportion to their income distributions,” the report states.

The percentage of average local wages required to pay for major homeownership expenses (including mortgage, insurance and taxes) for a median-priced, single-family home in Akron is 22%, according to Attom Data, which is lower than the recommended 28% most financial experts estimate as the maximum buyers should spend.

4. Cleveland, Ohio

Median listing price: $169,450
Median down payment percent of sale price: 7.1%
Per capita personal income (2020): $59,923
Median property taxes paid, by county (2019): $3,219

The third largest city in Ohio, Cleveland is one of the most affordable cities in the United States. However, that affordability is attracting investors—something locals are trying to combat. A recent report by the Vacant and Abandoned Property Action Council (VAPAC) shows that investor activity has tripled, going from 7.17% in 2004 to 21.1% in 2020.

Investor activity for single-family homes is concentrated heavily on the east side of Cleveland, up to 46% of all purchases, which is home to a majority of Black families now being pushed out by pricing.

“We believe that such activity is part of the larger legacy of continued racial bias in the American housing market,” the report stated.

The Cuyahoga County Down Payment Assistance Program offers eligible low- to moderate-wage earners down payment assistance of up to 10% of the qualifying home purchase price, or a maximum of $14,900.

5. Scranton, Pennsylvania

Median listing price: $182,400
Median down payment as a percent of sale price: 5.5%
Per capita personal income (2020): $52,580
Median property taxes paid, by county (2019): $2,613

Not only are homes in Scranton priced well below the national median, homebuyers also spend less of their paycheck toward housing.

The percentage of average local wages required to pay for major homeownership expenses (including mortgage, insurance and taxes) for median-priced, single-family homes in Scranton is 18.8%, according to Attom Data, which is lower than the recommended 28% most financial experts estimate is the maximum buyers should spend.

6. Syracuse, New York

Median listing price: $184,900
Median down payment as a percent of sale price: 2.3%
Per capita personal income (2020): $58,919
Median property taxes paid, by county (2019): $4,087

Syracuse has the most affordable single-family homes in the state of New York, making it an attractive option for people who want to leave costlier major cities in exchange for more space they can own. Some 27% of renters looking for housing in the Syracuse area were located in New York City, according to search data from Apartment List.

“There are more investors and a lot more cash in Syracuse now than before the pandemic,” says Kelly Loya, a real estate broker at Mytown Realty in Syracuse. “Many people are forced to look for smaller places and even in places they wouldn’t normally look. Buyers have to be so patient right now.”

7. Pittsburgh, Pennsylvania

Median listing price: $197,000
Median down payment as a percent of sale price: 5.8%
Per capita personal income (2020): $63,675
Median property taxes paid, by county (2019): $3,034

Despite Pittsburgh’s shrinking population, its per capita income continues to climb. Earnings for the area’s workers rose 7% in 2020 compared to the year before, and housing prices have remained relatively low compared to wages.

The average down payment amounts are also on the…