June 19, 2024 Mark Ferguson
Finding an affordable city to buy a home can be difficult. Getting a good deal is key to my investment strategy. To help you find the best investment opportunities, here is a list of the top 10 most affordable large cities to buy a home in the United States. These cities offer not only affordable housing, but also promising growth prospects and quality of life.
To measure this, let's look at house prices and wages.
overview
Of course, a low price doesn't necessarily mean it's a good deal. To learn more about how to find a good deal, check out my Master the Deal course.
The data is for May 2024 and comes from the National Association of Realtors (NAR), Zillow Home Value Index, the U.S. Census Bureau, Regional Economic Development Reports, and the U.S. Bureau of Labor Statistics (BLS).
Many areas of the country are filled with smaller towns with more affordable rents, and while it may surprise many, people earning lower wages are actually more likely to be able to purchase a home than those earning much higher incomes in more expensive areas.
Top 10 Most Affordable Cities (Wages and Housing Prices)
1. Detroit, Michigan
Detroit has undergone a remarkable resurgence over the past decade, and the city is known for its affordable housing market, with a median home price of around $70,000.
The average wage in Detroit is about $36,000.
Ongoing redevelopment projects and a growing tech scene are making Detroit an attractive option for first-time homebuyers and investors alike.
2. Cleveland, Ohio
Cleveland is a city that combines affordable housing with a vibrant cultural life. The average home price in Cleveland is about $85,000.
The average wage in Cleveland is about $38,000.
The city's diverse economy, driven by healthcare, education and manufacturing, makes it a great target for real estate investment.
3. Pittsburgh, Pennsylvania
Pittsburgh is also a city that combines affordability and opportunity, with a median home price of about $150,000.
The average wage in Pittsburgh is about $42,000.
Pittsburgh offers a strong job market, especially in the fields of technology, healthcare and education, and the city's rich history and growing infrastructure add to its appeal.
4. Indianapolis, Indiana
Indianapolis combines affordable rent with a high quality of life, with the median home price being around $175,000.
The average wage in Indianapolis is about $44,000.
The city is known for its strong job market, excellent schools and vibrant cultural scene, making Indianapolis the ideal city for families and investors looking for long-term growth.
5. Buffalo, New York
Buffalo is experiencing a resurgence with a median home price of about $130,000.
The average wage in Buffalo is about $40,000.
The city's affordable cost of living and active job market in the healthcare and education sectors make it an attractive location for homebuyers.
6. Memphis, Tennessee
Memphis offers an affordable housing market with the average home price being around $120,000.
The average wage in Memphis is about $37,000.
Known for its rich musical traditions and vibrant culture, Memphis also boasts a strong economy driven by transportation, healthcare and education sectors.
7. Birmingham, Alabama
Birmingham combines affordability with a growing economy, with the median home price being around $160,000.
The average wage in Birmingham is about $38,000.
The city's diverse economy includes finance, healthcare and manufacturing. Birmingham's Southern charm and historical importance make it a great place to live.
8. Kansas City, Missouri
Kansas City offers affordable housing with an average home price of about $190,000.
The average wage in Kansas City is about $45,000.
The city is known for its thriving job market, especially in the fields of finance, medicine, and engineering. Kansas City's vibrant arts scene and friendly community also add to its appeal.
9. Oklahoma City, Oklahoma
Oklahoma City offers affordable housing with the average home price being around $160,000.
The average wage in Oklahoma City is about $40,000.
The city's growing economy is driven by the energy, aerospace, and biotechnology industries. Oklahoma City's low cost of living and family-friendly environment make it a great place to buy a home.
10. St. Louis, Missouri
St. Louis rounds out the list with a median home price of about $150,000.
The average wage in St. Louis is about $41,000.
The city has a diverse economy with thriving healthcare, education and manufacturing industries. St. Louis' rich history, cultural attractions and affordable housing market make it an interesting place to invest.
This table summarizes the information here. The housing affordability ratio is the wage divided by the price of housing. The higher the housing affordability ratio, the more affordable housing is.
City Average Home Price Average Wage Affordability Ratio Detroit, MI $70,000 $36,0000.51 Cleveland, OH $85,000 $38,0000.45 Buffalo, NY $130,000 $40,0000.31 Memphis, TN $120,000 $37,0000.31 Pittsburgh, PA $150,000 $42,0000.28 St. Louis $160,000 $42,0000.38 St. Louis, Missouri $150,000 $41,0000.27 Indianapolis, Indiana $175,000 $44,0000.25 Oklahoma City, Oklahoma $160,000 $40,0000.25 Birmingham, Alabama $160,000 $38,0000.24 Kansas City, Missouri $190,000 $45,0000.24
Conclusion
These 10 cities offer some of the most affordable housing markets in the United States, each with a unique combination of economic opportunity, cultural attractions and quality of life. Whether you're a first-time homebuyer or an investor looking for an up-and-coming real estate market, these cities are a great starting point.
What do you think about this list? Let me know in the comments below.