When you make the decision to buy an affordable home, there are several key considerations.
To measure this, Forbes Advisor recently compared cities with a population of 100,000 or more, using 2020 median income statistics from the Census Bureau, monthly mortgage payments from Realtor.com (based on 2020 median listing price and 3% fixed interest rate with no fees), monthly food and utility costs from the Bureau of Labor Statistics, and median real estate taxes and average state income taxes from the Tax Foundation.
So what are the most affordable cities to buy a home?
Based on these criteria, here are 10 of the most affordable cities in the U.S.:
- Detroit, MI
Once primarily known as the headquarters for the U.S. automotive industry, the city has since attracted other big-name employers and boasted a median home listing price in 2020 of just $59,000 and median real estate taxes of $1268, which counterbalances a low median salary of $36,000. Foodies will appreciate the diverse food offerings available throughout the city with an annual food cost of $8,277.
- Cleveland, OH
There’s a lot to do in Cleveland. From the Rock ‘n’ Roll Hall of Fame and a variety of pro sports to nature preserves, beaches, and more. But what makes it one of the most affordable cities on the list? Starting with a median home price of $140,000, Cleveland residents, on average, have low monthly utilities of $187 (edged out only by Toledo on this list). And with a median salary just over $47,000, the city continues to be a source of employment growth thanks to recent growth in technology-based jobs and the Cleveland Innovation District project, which is forecasting 20,000 new jobs over the next 10 years.
- Toledo, OH
Another city on the upswing, Toledo benefits from its universities and high-skilled job opportunities. With a median home listing price in 2020 of $95,000, Toledo offers plenty of bang for the real estate buck. Through its resurgence, the city has a cost-of-living index of 87, making it 13% more affordable than the national average.
- Memphis, TN
Memphis offers its residents a growing tech environment, a historic music scene, and U.S. and state government as prominent employers. In addition to a median home price listing of $123,000, monthly utilities averaged $158 in 2020 (lowest on this list), while the average state income tax is just 1% (also lowest on this list).
- Baltimore, MD
With a median salary of $50,108 and a 2020 home median listing price of $191,000, Baltimore is an affordable option for home buyers. With a large concentration of federal, state, and local jobs comprising their economy, Baltimore is becoming a destination spot for those looking for affordable housing prices. The city is also appealing for its easy commuting via train to Washington D.C., avoiding D.C.’s higher home prices.
- Milwaukee, WI
Once mainly known for its breweries, Milwaukee now is a leader in the healthcare sector, so opportunities abound. Plus, with a median home price listing of $167,000 on a median salary of $41,166, Milwaukee offers its residents great value—especially as a more affordable housing alternative to other large nearby cities such as Chicago, which in 2020 had a median home listing price of $370,000.
- Montgomery, AL
If you’re looking for the low real estate taxes, then you’ll love Montgomery, AL. At $512 a year, it not only boasts the lowest median annual real estate taxes on this list, but it also offers many career opportunities in the aerospace industry, with several major companies having a prominent presence there, including the U.S. Department of Defense.
- Kansas City, KS
With a median home listing price of $170,000 in 2020, Kansas, KS could be a potential landing spot for homeowners looking for value. Healthcare is the top industry in the area with manufacturing and transportation also serving as strong employers. Overall, the cost of living in Kansas City is 18.4% lower than the U.S. average.
- Des Moines, IA
Des Moines residents benefit from just 19.71% of their income spent on living expenses. Low-housing costs continue to attract residents, making it an increasingly popular and friendly place to live. In addition, Des Moines offers its residents quiet neighborhoods that include colonial and Tudor-style homes built in the early 1900s that are minutes away from a fun downtown experience. There’s also lots to do outdoors such as bike trails, parks, and lakes.
- Fayetteville, NC
Known for being one of the most robust retail markets in the U.S., Fayetteville offers attractive shopping, dining, and entertainment options. The defense industry is also a major job creator in the area with 55,000 of the city’s 200,00 residents living at the Fort Bragg military base. Fayetteville continues to attract different cultures and features a historic area, museums, and benefits from its convenient location between the state’s mountains and coastline with nature preserves and parks. And if you’re into culinary delights, everything from Italian and Korean to downhome Southern cooking awaits your palate.
Ready to Make the Move?
If you’re looking to buy a home but don’t want to break the bank, consider searching for your dream house in one of these cities. Use our Home Affordability Calculator to find out how much home you can afford! And when you’re ready to talk loans, one of our Loan Officers will be glad to help! Just click on the button below to get started.