Aiming to buy a house but worried about home affordability? You may want to consider relocating to a more affordable market. The good news is there are affordable homes for sale in different areas of the country -- if you're willing to think outside your comfort zone.
Should you move? Do your homework first
But moving to a different town or state is a big step. You'll want to research the area carefully, including the job market, commute time, and neighborhood amenities.
The price of a home isn't everything, yet the lack of affordable homes has proven to be a barrier to ownership for many. However, a new report lists the top 10 markets for home affordability.
What the research shows
A recently-published study from ATTOM Data Solutions revealed that many housing markets remain financially out of reach for average wage earners seeking to purchase a median-priced home.
But the news isn't all bad -- there are key areas of the country where buyers can find property for less than they may expect. ATTOM flagged areas where buyers could purchase homes with as little as 3% down at a relatively low salary, and where local incomes were sufficient enough that a home purchase did not consume a large chunk of earnings.
The list below shows both the required annual income for a median home purchase and how much of the median income a home purchase consumes, ranked from smallest percentage of income. Note that many mortgage lenders like to see this percentage at perhaps 28% or less, so these numbers are very good.
Related: How Much House Can I Afford? (Affordability Calculator)
| County | Metro area | Annualized weekly wages | % of income needed |
| Cambria, PA | Johnstown, PA | $48,633 | 12.0% |
| Macon, IL | Decatur, IL | $65,611 | 14.0% |
| Montgomery,AL | Montgomery, AL | $59,423 | 14.5% |
| Schuylkill,PA | Pottsville, PA | $52,988 | 15.8% |
| Saint Lawrence, NY | Ogdensburg-Massena, NY | $59,176 | 15.9% |
| Mobile, AL | Mobile, AL | $59,800 | 16.2% |
| Bibb, GA | Macon, GA | $53,898 | 16.3% |
| Peoria,IL | Peoria, IL | $73,086 | 16.8% |
| Wayne, MI | Detroit-Warren-Dearborn, MI | $74,464 | 17.0% |
| Rock Island, IL | Davenport-Moline-Rock Island, IA-IL | $70,148 | 17.1% |
3rd quarter 2024. Source: ATTOM Data
Reading between the research lines
In an earlier version of the updated report, Todd Teta, chief product officer with ATTOM Data Solutions, acknowledged that home affordability remains a big problem.
"Buying a home continues to be a rough road to navigate for the average wage earner in the United States," he said. "Prices have been going up substantially faster than earnings without any immediate end in sight, which continues to make homeownership difficult or impossible for a majority of single-income households and even for many families with two incomes."
But there's a silver lining here.
While mortgage rates are currently nowhere near historic lows, they are well below recent peaks, and there's reason to expect they will at least return to "normal" levels over time. Home price increases cannot outstrip income gains indefinitely, and there are also some signs that prices are starting to soften in at least some markets around the country.
Looking closer at the data, some trends become clear.
"Prices are affordable to average wage earners across much of the country's lowest-prices areas, generally in the Midwest and South," Teta told me. "They are largely out of reach for people in the high-end of the market, mostly in the Northeast and West. But that's changing as prices rise faster in the cheapest areas and slower in the most expensive."
Today's home buyers are placed in an interesting climate.
"There's little that potential homebuyers can do except be opportunistic," adds Keith Gumbinger, HSH.com's vice president. "A quick drop in mortgage rates may provide a shot at more affordable conditions, and more houses coming onto the market for sale could improve the odds of being successful in finding a suitable home to buy."
Related: The Salary Needed to Buy a Home in the 50 Largest Metros
Looking closer at the most affordable markets
Anna DeSimone, author of "Housing Finance 2020," says these 10 affordable markets represent good values for buyers.
"Each of them has shown strong rates of appreciation. And property values there have increased in recent years," she says.
DeSimone notes that some of these 10 areas have a strong state-chartered finance agency that serves the entire state. These agencies offer special buying and financing incentives for qualified buyers.
"Eligible buyers can receive down payment assistance, affordable mortgage financing, and other incentives," she adds. Some of the states "have a number of local housing partnership organizations that provide down payment help and other homeownership services."
Related: See the 10 Most affordable of the top 50 metro housing markets
Jeremy Sopko, CEO of National Lending, also found another big trend in the list.
Several of the 10 markets "are in the Midwest and Rust Belt counties. These markets have been able to attract more people and businesses back to these historic American settings," says Sopko.
Related: How to Prepare to Buy Your First Home
Before buying a home in an affordable market
Prior to committing to a home purchase in a less expensive metro, it's smart to do your homework.
"You want to research other cost-saving advantages in that new location. For example, are the costs for auto and homeowners insurance, utilities, child and pet care, and family health facilities lower? Such savings can help sustain long-term affordability," suggests DeSimone.
Another question to ask: How long will it take to get to and from work?
"Increasingly, the cost and time of commuting is a significant factor," insists Bruce Ailion, Realtor and attorney. "While gasoline prices are moderate, the travel time and aggravation factor associated with a commute are growing. Homebuyers considering the more distant location because of price need to look at the total cost of commuting. This includes the time lost from family, leisure or other activities that could be saved if they lived closer in."
Ultimately, "your happiness and your family's happiness is what's most important," notes Sopko. "That's why you have to consider several factors beyond price. That includes the quality of the local schools, crime statistics, and community atmosphere."
Lifestyle amenities are valuable, too.
"One consideration with lower-priced homes is often a lack of convenient access to favorite shops and places. You may not find a Whole Foods, Starbucks, or fast food store nearby," says Ailion. "You often pay for these conveniences in areas with higher real estate values."
This article was updated by Keith Gumbinger
