Got the Keys: 10 of the Most Affordable Housing Markets in the U.S.

For most potential homebuyers, the real estate market is looking grim. Mortgage rates have doubled from 3 percent loans in early 2022 to over 6 percent in 2023; a lack of inventory can lead to bidding wars in hot markets.

Is there good news for anyone other than real estate agents? In some markets, yes—but you’ve got to be willing to relocate.

A new data analysis by mortgage lender Rocket Homes and BestPlaces.net examined 383 metropolitan areas and assessed quality-of-life elements like crime rates, unemployment rates, and environmental issues. Next, researchers looked at their respective real estate markets, finding the median home price and expected monthly mortgage payment that would prove comfortable for buyers making $65,000 annually. State income and sales taxes were also factored. The idea was to find 10 metro areas demonstrating affordable housing potential, with mortgage payments not to exceed 30 percent of gross monthly income—a common rule of thumb.

The overall winner: the Midwest.

Wausau, Wisconsin landed in first place, with a median home price of just over $228,000 and plenty of outdoor activities (skiing, hiking). Lafayette, Indiana gives those earning $65,000 a little bit of a financial cushion, as it’s well above the area’s median income of $54,490. Others, like Columbia, Missouri, and Syracuse, New York, have plentiful entertainment and shopping options thanks to nearby universities.

The estimated mortgage payment was calculated using a 6.5 percent interest rate and a 20 percent down payment, along with average property taxes for the area. It doesn’t include home insurance premiums.

While this data is useful, “affordable” is always a relative term. In high-demand housing markets, it’s not uncommon for buyers to pay above a home’s listed asking price, an amount that may or may not be financed by a lender depending on the property’s appraised value. You might, for example, pay $275,000 for a home listed at $250,000. If it only appraises for $250,000, you must write a check for the down payment ($50,000) plus the additional $25,000.

Nor does this list take into consideration home inventory, which can change daily. As of this writing, Wausau has just 26 single-family homes for sale.

The bottom line? It’s still hard to buy a house, but these markets may give you a better starting position.

[h/t The New York Times]