MW 10 places in the U.S. where people who make under $100,000 can easily buy a house - for now
By Aarthi Swaminathan
To afford the typical home in the U.S., a person needs to make an annual income of $116,000, Realtor.com says
Dreaming of buying a house in today's challenging real-estate market? In this economy, you'll need to make at least six figures - in most markets.
But there are still some parts of the U.S. where aspiring homeowners can comfortably afford to buy even if they make less than $100,000, according to a new report from Realtor.com.
Based on Realtor.com's April housing data, to afford the typical home that's listed at a median price of $430,000, a person needs to make an annual income of $116,000.
That figure assumes that buyers are spending only 30% of their income on housing costs, making a 20% down payment on a home, and taking on a 30-year fixed-rate mortgage, as well as paying property taxes and home insurance premiums.
The 30-year mortgage rate averaged 7.29% for the week ending April 26, according to the Mortgage Bankers Association.
But median household income was $74,850, according to the latest data from the U.S. Census Bureau.
For someone who makes less than six figures, the best path to homeownership lies in the Midwest, according to Realtor.com.
Realtor.com is operated by News Corp subsidiary Move Inc. MarketWatch publisher Dow Jones is also a subsidiary of News Corp.
Cheapest places to buy a house
Here are the top 10 metro areas with the lowest income required to buy a median-priced home:
Metro area Annual income needed to buy median priced home Median home price Pittsburgh, Pa. $250,000 Detroit-Warren-Dearborn, Mich. $69,000 $250,000 Cleveland-Elyria, Ohio $71,000 $255,000 Birmingham-Hoover, Ala. $75,000 $297,000 Buffalo-Cheektowaga, N.Y. $79,000 $285,000 St. Louis, Mo.-Ill. $82,000 $294,000 Rochester, N.Y. $87,000 $295,000 Indianapolis-Carmel-Anderson, Ind. $87,000 $340,000 Louisville/Jefferson County, Ky.-Ind. $87,000 $327,000 New Orleans-Metairie, La. $90,000 $335,000
Known as an industrial hub in the past, Pittsburgh today is a city of about 300,000 that's home to three pro sports teams - the NFL's Steelers, the NHL's Penguins, and Major League Baseball's Pirates. It also boasts multiple universities including Carnegie Mellon, as well as a variety of cultural institutions including the Carnegie Museums of Pittsburgh, the Pittsburgh Zoo and Aquarium, and the National Aviary.
But home prices are rising in Pittsburgh, so would-be home buyers may need to fact fast. The median home sale price in Pittsburgh rose 5.3% in March, as compared to the year before, according to data from real-estate brokerage Redfin $(RDFN)$, which is higher than the increase in national home prices, which was 4.8%.
The city seems to be attracting attention from people who live in more expensive real-estate markets. New Yorkers showed the most interest in moving to Pittsburgh, based on user data, Redfin said, followed by people living in Washington D.C., and Los Angeles.
Detroit, second on the list, and another prominent industrial city that has suffered from depopulation, has been touted as a comeback story as its local government, alongside several businesses, seeks to revitalize its downtown area. The population was at about 620,000 as of 2023.
Further down the list, affordable upstate New York city Buffalo was also Zillow's $(ZG)$ pick for the hottest real-estate market of 2024, thanks in part to its relatively cheap homes and plentiful job prospects. About an 1.5-hour's drive east, the Rochester suburb of Irondequoit was ranked as the top market for first-time home buyers by Realtor.com earlier this year.
Cleveland and Indianapolis also ranked among Zillow's "hottest" markets for 2024, in addition to making Realtor.com's list of metro areas where a less-than-six-figure salary can cover housing costs.
Most expensive places to buy real estate
At the other end of the spectrum, the most expensive housing markets require more than double the income to buy a median-priced house.
In major metro areas in California, such as Los Angeles, San Diego, San Francisco and San Jose, the household income required to buy a typical house exceeds $250,000, Realtor.com said.
Here are the top five metro areas with the highest income required to buy a median-priced home:
Metro area Annual income needed to buy median priced home Median home price San Jose-Sunnyvale-Santa Clara, Calif. $1,467,000 Los Angeles-Long Beach-Anaheim, Calif. $298,000 $1,192,000 San Diego-Chula Vista-Carlsbad, Calif. $259,000 $1,050,000 San Francisco-Oakland-Berkeley, Calif. $256,000 $1,027,000 Boston-Cambridge-Newton, Mass.-N.H. $226,000 $870,000
"In Los Angeles, Riverside, and San Diego, rising home prices and mortgage rates have combined to push required incomes higher - in some cases like in these California markets, up by double digits compared to one year ago," Danielle Hale, chief economist at Realtor.com, said in a statement.
-Aarthi Swaminathan
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May 02, 2024 06:00 ET (10:00 GMT)
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