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Mortgage rates have been trending upward for much of 2024, but have eased somewhat in recent weeks. According to Freddie Mac, the average interest rate for a 30-year fixed-rate mortgage was 6.95% as of July 3. That's down significantly from a high of 7.79% in October 2023 and is below the 52-week average. Rates for 15-year fixed mortgages are also below the 52-week average.
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The trend bodes well for homebuyers who haven't had much to celebrate recently. The median existing home price for all U.S. home types reached $419,300 in May, the highest median price on record and up 5.8% from a year ago, according to the National Association of Realtors. All four U.S. regions recorded price increases.
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Another report, released earlier this week by Atom Data Solutions, concluded that home affordability in the U.S. is at its lowest level since 2007, once mortgage, taxes and insurance costs are taken into account. These costs now make up 35.1% of the average homeowner's take-home pay, well above the typical lending guideline of 28%.
“The latest home affordability data presents clear challenges for homebuyers,” Atom CEO Rob Barber said in a news release. “Home prices are rising and mortgage rates remain relatively high, factors that are making homes more unaffordable. We often see these trends intensify during the spring buying season when buyer demand increases. However, this year's trends have been especially challenging for prospective homebuyers, more so than at any point since the housing market boom began in 2012.”
But lower mortgage rates and a growing number of housing markets could bring some good news in the near future.
“Ultimately, rising inventory should boost home sales and help moderate home price growth in the coming months,” NAR Chief Economist Lawrence Yun said in a statement. “Increasing housing supply is good news for consumers who want to see more properties before deciding to buy.”
This is especially good news for consumers who live in or near major cities that haven't experienced significant home price growth. Using the latest data from Realtor.com, GOBankingRates found 20 cities where the median home price is well below the national average.
Here we have the affordable housing market.
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Baltimore, Maryland
Median home price: $224,900
Price per square foot: $165
Buffalo, New York
Median home price: $215,000
Price per square foot: $156
Cleveland, Ohio
Median home price: $135,000
Price per square foot: $102
Des Moines, Iowa
Median home price: $240,000
Price per square foot: $206
Detroit, Michigan
Median home price: $93,300
Price per square foot: $82
Fort Worth, Texas
Median home price: $360,000
Price per square foot: $187
Indianapolis, Indiana
Median home price: $275,000
Price per square foot: $149
Jacksonville, Florida
Median home price: $319,900
Price per square foot: $194
Kansas City, Missouri
Median home price: $275,000
Price per square foot: $166
Louisville, Kentucky
Median home price: $285,000
Price per square foot: $163
Memphis, Tennessee
Median home price: $230,000
Price per square foot: $140
Montgomery, Alabama
Median home price: $215,000
Price per square foot: $110
Milwaukee, Wisconsin
Median home price: $199,900
Price per square foot: $155
Oklahoma City, Oklahoma
Median home price: $300,000
Price per square foot: $168
Omaha, Nebraska
Median home price: $344,500
Price per square foot: $173
Rochester, New York
Median home price: $159,900
Price per square foot: $117
St. Louis, Missouri
Average Listing Price: $209,900
Price per square foot: $151
St. Paul, Minnesota
Median home price: $300,000
Price per square foot: $212
Toledo, Ohio
Median home price: $125,000
Price per square foot: $99
Wichita, Kansas
Median home price: $300,000
Price per square foot: $139
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This article originally appeared on GOBankingRates.com: Mortgage Rates Fall: The 20 Most Affordable Housing Markets