Here Are the 10 Most Affordable Metro Areas to Buy a Home
It's cheaper to rent in 75% of major US cities, but these 10 metro areas offer aspiring homeowners hope.
There's that refrain in uppity economy publications that suggest that younger people in the US don't own homes because we buy avocado toast and go out to eat. Obviously, those were incorrect inferences. We can't afford to buy homes because of wage stagnation and predatory developers. And also, it turns out that in most major metropolitan areas in the country, it's actually more cost-effective to rent rather than buy.
A study from Realtor.com found that in June 2022 the median US rent hit another high for the 16th consecutive month in a row. So it's not that rent is getting cheaper, but rather that the cost of financing a home purchase has gotten so high that it is not only driving up rent but also making renting the more financially viable option. Mortgage rates jumped by 2% from January to June. Monthly costs for renting in 38 of America's 50 largest cities were cheaper than monthly costs for first-time homeowners. In the top 10 cities, the study found that renting was at least 52% more affordable than home ownership.
Being a first-time home buyer in just 10 metro areas is more affordable. Below is a list of those cities for those looking to ditch the monthly rent checks.
- Pittsburgh, Pennsylvania
- Birmingham, Alabama
- St. Louis, Missouri
- Cleveland, Ohio
- Baltimore, Maryland
- Louisville, Kentucky
- Virginia Beach, Virginia
- Indianapolis, Indiana
- Cincinnati, Ohio
- Kansas City, Missouri
"Whether you're looking for a rental or trying to buy your first home, our analysis highlights the importance of prioritization when deciding where to live," said Senior Economic Research Analyst for Realtor.com Joel Berner in a press release. "Take the example of areas with smaller gaps between rents and monthly starter homeownership costs, which may still offer relatively affordable starter homeownership costs. Many of these metros are also attracting home shoppers from out-of-state, in turn driving up the overall cost of living. For first-time buyers prioritizing lower home prices, you may still find options in these areas, but make sure to account for higher costs of other expenses in your budget."
So if you were planning on buying a home, it might be advantageous to wait until mortgage rates decrease. If you want something sooner, consider relocating to one of the cities above, where you'll get more bang for your buck.