Finding a home that meets both your needs while leaving money in your wallet for fun activities may feel like an impossible feat, but real estate markets vary and some offer affordable homes. If purchasing is a top priority and location is flexible then one of these local markets could be worthwhile to investigate further. So, let us explore the most affordable places to buy a home.
These factors combine to produce your mortgage-to-income ratio. The proportion of your income spent on housing costs. Aiming to spend roughly one-third on your housing costs should allow for enough leftover money for other necessities, debt consolidation, or savings for future needs.
Determining what home you can afford can involve numerous considerations beyond simply your mortgage-to-income ratio. Read on for helpful tips to establish your price range; and be sure to reach out to a lender if any further help is required.
20 Most Affordable Places to Buy a Home
Some of the most affordable places to buy a home are:
1. Pittsburgh, PA
Three rivers define this waterfront city that boasts 446 bridges, more than even Venice!
- Average Home Value in 2016 = $202,454
- 19% of Monthly Income Needed for a typical mortgage payment
- Mortgage Payment = $1,053 Years to Save Up for 20%
- Down Payment = 5.3
2. Jackson, MS
Nicknamed the City With Soul,” this capital city of Texas offers rich historical significance while welcoming guests with generous Southern hospitality.
- At $185,338 the typical home is worth
- 22% of the monthly income needed to service
- its mortgage payment of $964;
- Saving for a 20% down payment typically takes 5.7 years of saving each year.
3. Syracuse, New York
As a regional hub of education and entertainment in Central New York, this city should see great advantages from the establishment of an industrial park for computer chip production near its northern suburbs.
- Home values typically average $212,404
- 23% of the monthly income needed to service an average mortgage is needed each month
- Its payment averaged to be about $1105 on an ongoing monthly basis
- 5.4 years to save for a 20% down payment.
4. Toledo, OH
Toledo is known for its eclectic architectural styles and long history of glass manufacturing; among its many surprises is an 8600 sq-foot aquaponics farm downtown.
- Home values on average range between $176,787 to $205,000
- 24% of monthly income is required
- Typical mortgage payments of $920 monthly
- 5 to 5.6 years are needed to save enough for 20% down payments respectively.
5. Wichita, Kansas
Wichita stands out as an oasis in Kansas despite its size; average one-way commute times average 19 minutes on average.
- Average home value: $201,780
- The monthly income needed for mortgage payments typically stands at 24%
- Mortgage payments averaged approximately $1,050 per month.
- Saving for a 20% down payment required 5.7 years to reach that point
6. Akron, Ohio
Akron boasts two higher education institutions. The University of Akron and Kent State University bring an energetic youthfulness into their surroundings.
- Average home value: $207,190
- Typical monthly mortgage payment: $1,078
- About saving for a 20% down payment within five and eight years
7. St. Louis, MO
St. Louis is widely known as “The Gateway to the West”, reflecting this rich legacy through its architecture, historic neighborhoods, and iconic structures.
- Average home values range between $242,214 to $252K
- 25% of monthly income being needed to pay a typical mortgage
- Typical mortgage payment: $1260 per month
- six to eight years of savings as the down payment threshold of 20%
9. Rochester, New York
Rochester is an industrial center of Western New York that has undergone many changes. While industries have come and gone, Rochester still maintains an active arts scene that hosts several cultural festivals every year.
- Average home values range between $233,753 to $255K
- monthly mortgage payments estimated between 25%-29%
- typical payments estimated at around $1,216
- it typically takes 6-8 years to save up for 20% down payment
10. Detroit, MI
This riverfront city, which sits along the Canadian border, embraces diversity and continues to remake itself and its downtown core.
- Typical home value: $240,536
- Share of monthly income needed to pay the typical mortgage: 26%
- Typical monthly mortgage payment: $1,251
- Years to save for 20% down payment: 6.2
11. Birmingham, AL
Birmingham was one of the key battlegrounds during America’s civil rights struggle during the 1960s and today boasts an extensive cultural landscape as well as top medical care institutions and clinics.
- Average home value: $247,702
- Monthly income needed to pay the typical mortgage: 26%
- Payment amount per month: $1,289
- The typical house requires a 20% down payment so this could take approximately seven years of savings to reach that mark.
12. Baton Rouge, LA
Home to Louisiana State University and known for its diverse cultural offerings such as French, Spanish, African, and Creole traditions that continue in music, foo,d and festivals in this Southern town.
- Average Home Value is $228,418
- The monthly Income Needed to Support the Average Mortgage Payment is 26%
- Payment is typically $1188/Month
- Years Required for Saving 20% Downpayment = 6
13. Indianapolis, IN
Home to one of the nation’s oldest auto racing circuits and located along its historic waterfront district, Indianapolis earned one of Zillow’s hottest housing markets list for 2024 as an economical housing option.
- Average house value: $270,026
- Monthly income required to cover typical mortgage: 26%
- Mortgage payment amount typically ranges between $1,405-$1405
- Years it would take to save for a 20% down payment: 6.66-14
14. Little Rock, AR
Little Rock was selected by Zillow as one of their recommended cities for first-time buyers in 2023.
- Home values typically average $212,713 with 26%
- Monthly income needed to pay the typical mortgage (26%-28.75%);
- typical monthly mortgage payment: $1.107 (typical home value = 212.713)
- time required to save 20% down payment is 6-6-1 years
15. Des Moines, IA
Des Moines offers an intriguing blend of contrasts; hosting one of America’s oldest state fairs while also serving as an important center for insurance and financial services.
- Average Home Value of $270,827
- Monthly Income Required to Cover a Typical Mortgage (26%)
- Payment Amount is $1409
- Time To Save Up for 20% Down Payment is 6 Years
16. Columbia, SC
Homes listed and under contract in Columbia typically take 17 days from listing to the final sale agreement.
- On average, home values in Cleveland, OH average $243,161,
- 26% of monthly income is required to cover mortgage costs (26% for a typical loan).
- Average monthly mortgage payments are around $1,265.
- It usually takes 7-17 years for buyers with 20% down payments to save enough funds for a down payment of at least 20% of this price tag to find their dream homes in this market.
17. Cleveland, OH
Chicago is famously home to attractions like the Rock & Roll Hall of Fame and boasts one of the second-largest theater districts after New York.
- At $215,913 the typical home is worth 26% of monthly income to cover its mortgage payment
- 26% of monthly income needed for paying $1123 as a monthly mortgage payment.
- Saving for a 20% downpayment requires saving over six and one-half years
18. Buffalo NY
Zillow named Buffalo the hottest market of 2024 because it is famed for epic snowstorms and proximity to Niagara Falls.
- Average home value: $244,825
- A 26% share of monthly income was needed to afford the typical mortgage
- 26% monthly payment of approximately $1274
- Years to save for a 20% down payment
19. Grand Rapids, MI
The city sits along the Grand River, boasting numerous breweries as well as relatively lower costs of living than many surrounding cities.
- Home Value is $309,531.
- The Monthly Income Needed for Loan Payments is 27%
- $1.610 for a monthly payment is the typical mortgage payment and the years required to save for 20%
- Downpayment is 7.3-20
20. Memphis, TN
Memphis is recognized as the birthplace of blues music and home to Elvis Presley’s Graceland estate. One of the most-visited homes in America.
- Typical home value: $234,635
- Share of monthly income needed to pay the typical mortgage: 27%
- Typical monthly mortgage payment: $1,221
- Years to save for 20% down payment: 7
Understanding Your Housing Affordability
After exploring the most affordable places to buy a home. Now it’s time to understand your house affordability. There are multiple strategies available for calculating what home you can afford without exceeding more than 33% of your annual income on housing costs. Below are three of them.
1. Use the Affordability Calculator
The Affordability Calculator can give you a snapshot view of what you can afford by entering basic details about your annual income, debt expenses, and planned downpayment toward purchasing a property. Or take it one step further by exploring various interest rate scenarios or loan terms for even further insight.
2. Use A Debt-to-Income Calculator
You can utilize any Debt-to-Income Calculator. It takes into account your annual income as well as monthly debt payments like student loans or credit card bills to calculate your Debt-To-Income Ratio (DTI). The DTI ratio represents how much of your gross monthly income goes toward paying down debt each month; lenders use this measure of your ability to manage payments and repay loans successfully.
3. Prequalify or Pre-approve With A Lender
One way of more accurately gauging what your budget allows for is getting pre-qualified or pre-approved by a lender. Prequalification generally involves reviewing your creditworthiness to establish how much a lender might lend you toward buying a home; pre-approval, on the other hand, involves a more extensive review of finances as well as commitment from the lender for loaning a certain amount. An experienced lender will guide and explain all available financing options while working closely with your real estate agent, you should be able to tailor your search so it only shows homes within your price range.
Now you are aware of the most affordable places to buy a home for yourself. If you need any sort of help in buying a home at these most affordable places to buy a home you can get help from Las Vegas Real Estate Sales!
