Ranked: The Most Affordable U.S. Cities for Home Buyers
Just before the pandemic, the average home price in the U.S. was $313,000—a figure that has since jumped by 40% to $436,800 today. As home prices and mortgage rates increase, home ownership is becoming an unrealistic dream for some.
In the cities ranked above, however, buying a house is a much more attainable goal.
By looking at factors like the real estate tax rate, median home price appreciation, and cost of living, this study from WalletHub assesses the most affordable cities in the U.S. for home buyers. The scores in the ranking are out of 100 and the higher a score, the more affordable that city is for home buyers.
This ranking considers much more than just the price tag on a house when it comes to affordability. Using 10 metrics, which cover an array of important considerations for home buyers, the overall affordability score is measured for each city.
Here’s a closer look at the 10 categories and how each one was weighted and measured:
|Housing Affordability||25.00 points|
|Cost per Square Foot||16.67 points|
|Maintenance Affordability||8.33 points|
|Average Cost of Homeowner's Insurance||8.33 points|
|Cost of Living||8.33 points|
|Real Estate Tax Rate||8.33 points|
|Median Home Price Appreciation||8.33 points|
|Quarterly Active Listings per Capita||4.17 points|
|Vacancy Rate||4.17 points|
The highest-weighted metric is the median price of the home itself divided by the median household income in that area, or house affordability.
Other important metrics assessed include the availability of homes for sale, the average cost of homeowner’s insurance, maintenance costs, and many other vital things people must consider when purchasing a home.
Which U.S. Cities are the Most Affordable for Home Buyers?
Here’s a closer look at the 50 most affordable cities for home buyers in the U.S.:
|T9||Palm Bay, FL||69.1|
|13||Grand Rapids, MI||68.5|
|T15||Cedar Rapids, IA||68.2|
|18||North Las Vegas, NV||67.9|
|T19||Des Moines, IA||67.8|
|T22||Las Vegas, NV||67.2|
|T33||Fort Smith, AR||65.5|
|40||Green Bay, WI||64.9|
|41||High Point, NC||64.5|
|43||Cape Coral, FL||64.3|
|44||Fort Wayne, IN||64.1|
When it comes to the individual metrics, here’s a look at some cities which had the best scores in a few of the unique categories:
- #1 in Housing Affordability: Springfield, IL
- #1 in Maintenance Affordability: Sunnyvale, CA
- #1 in Rent-to-Price Ratio: Flint, MI
- #1 in Vacancy Rate: Miami Beach, FL
Location, Location, Location
Narrowing down which locations are feasible from a lifestyle and financial standpoint is a critical first step in the home-buying journey. Popular suburban communities and iconic hubs like Los Angeles or NYC hold great appeal, but these places command a higher price point or have housing stock that is incompatible with lifestyle needs.
On the flip side, some of the most affordable cities may have issues that negatively affect desirability. Flint, Michigan (#1), for example, is still widely perceived to have issues with its drinking water. Other places are high in crime or have a narrow range of economic opportunities, like Detroit (#4) or Yuma, Arizona (#9), respectively.
Many of the cities in the ranking are concentrated in Michigan, Arizona, and Ohio. In terms of big cities that are actually affordable, Pittsburgh, Columbus, Philadelphia, and Baltimore are examples of well-known spots to make the list.
There are also a number of ties in the ranking, with makes for interesting juxtapositions. For instance, Las Vegas is just as affordable as Cleveland, Ohio (#22). Here’s a look at some other cities that are equally affordable for home buyers:
- Montgomery, Alabama and Flint, Michigan (#1)
- Springfield, Illinois and Palm Bay, Florida (#9)
- Buffalo, New York and Cedar Rapids, Iowa (#15)
- Fayetteville, North Carolina and Des Moines, Iowa (#19)
- Dayton, Ohio and Erie, Pennsylvania (#25)
- Birmingham, Alabama; Louisville, Kentucky; Fort Smith, Arkansas; and Gilbert, Arizona (#33)
- Indianapolis, Indiana; Joliet, Illinois; and Tuscaloosa, Alabama (#45)
Overall, the home ownership rate in the U.S.—the share of homes that are occupied by their owners—is currently 66%, according to FRED data. While the trend shows a general recovery from the steep drop off that occurred during the pandemic, there is a while to go before the U.S. reaches pre-2020 figures. Perhaps, these affordable towns could offer a solution.
Ranked: The U.S. Cities with the Most Vacant Offices
This visual showcases the top ten U.S. downtown areas with the fastest growing rate of vacant offices from the pre-pandemic era to 2023.
Ranked: The U.S. Cities with the Most Vacant Offices
For many across the U.S., hour-long transit rides and traffic jams to work have been replaced by roll-out-of-bed commutes and stand-up desks at home, leaving vacant offices behind.
Long story short, more and more offices in major U.S. cities are empty. At the end of March 2023, the national average vacancy rate of U.S. offices had climbed as high as 18.6%.
So how have different cities in the U.S. been impacted? This ranking uses data out of fDi Intelligence to rank the top 10 cities that have seen the biggest increases in office vacancy rates from Q4’2019 to Q1’2023.
It is anticipated that by 2030, over 300 million square feet of U.S. office spaces will be obsolete.
According to Pew Research Center, around 35% of U.S. workers who can work from home in 2023 are already doing so all the time. In short, unless trends begin to reverse, offices in many cities will stay empty or continue getting emptier.
Here’s a closer look at the cities with the fastest growing vacancy rates in percentage points (p.p.) terms since just before the COVID-19 pandemic:
|Rank||City||State||Change in Vacancy Rates
Q4'2019 vs. Q1'2023
|#1||San Francisco||California||+19.8 p.p.|
|#2||New York City (Midtown South)||New York||+14.2 p.p.|
|#5||Salt Lake City||Utah||+13.1 p.p.|
|#6||New York City (Downtown)||New York||+10.7 p.p.|
|#9||Raleigh-Durham||North Carolina||+10.4 p.p.|
|#10||New York City (Midtown)||New York||+10.4 p.p.|
San Francisco has been hardest hit, with vacancy rates climbing by 19.8 p.p. in just over three years. Meanwhile, New York City has added over 16.8 million square feet, equivalent to 293 football fields, of new office space since Q4’2019 between its three most vacant neighborhoods.
However, not all of the cities with the most vacant offices are huge metropolises. Urban areas like Austin, Columbus, and Raleigh-Durham have also seen massive increases in their office vacancies, but their increasing rates may be blamed more on new construction and oversupply than to falling demand.
The Office Real Estate Market
At the national level, the supply of new office real estate has been dropping steadily since Q1’2022, down by a whopping 67% year-over-year.
Overall, it looks like U.S. office buildings are not as bustling as they once were, but there still may be opportunities for the office real estate market in growing cities.
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