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Home prices continue to soar nationally, but it’s still possible to find an affordable home in some areas.
The median price for existing homes reached $247,000 in October, according to the latest figures from the National Association of Realtors. That is a 5.5 percent increase since October 2016 — and marks the 68th consecutive month of year-over-year home price increases.
NAR’s chief economist, Lawrence Yun, explains that a low housing supply has contributed to high home prices:
“While the housing market gained a little more momentum last month, sales are still below year ago levels because low inventory is limiting choices for prospective buyers and keeping price growth elevated.”
Still, there are pockets of the country where the average person can afford to become a homeowner.
For example, the median home price is $146,000 in Cleveland and Pittsburgh, according to a recent analysis by mortgage research website HSH.com.
Cleveland and Pittsburgh are among seven cities in which you can afford to own a home with a salary of less than $40,000. There even more cities in which you can own with less than $50,000.
For its analysis, HSH used data from NAR, Freddie Mac and the Mortgage Bankers Association of America to determine the annual base cost of owning a home in the 50 largest U.S. metropolitan areas This cost reflects the principal and interest on a 30-year mortgage, property taxes and homeowner’s insurance.
The seven cities in which you can afford to become a homeowner on less than $40,000 are:
- Cincinnati: $39,694.76 salary
- Cleveland: $36,462.63
- Indianapolis: $36,670.05
- Louisville: $37,940.17
- Memphis, Tennessee: $37,820.45
- Oklahoma City: $37,306.76
- Pittsburgh: $35,205.49
In only four of the largest 50 metropolitan areas do you need a six-figure salary to afford to become a homeowner, HSH found. They are all in California:
- Los Angeles: $115,068.77
- San Diego: $116,119.96
- San Francisco: $171,330.88
- San Jose: $216,181.25
If you’re in the market for a home or hope to be in the future, save yourself thousands of dollars by checking out “How to Buy a House — Getting the Best Deal on a Mortgage” and Money Talks News’ mortgage search tool.