Young Americans are priced out of real estate markets in many of their favorite cities. Home values are so high in relation to income in the nation’s leading metropolitan areas that young home-buyers would need decades to save enough money to put down a 20% down payment.
But it doesn’t need to be that way. Young workers willing to look elsewhere, and away from the country’s most expensive hubs, can afford more conventional creature comforts like a car, a home, a yard, and room to spread out.
The move to less expensive locales is likely to accelerate as a result of COVID-19 and the #workfromhome movement, which will allow workers to base themselves further away from corporate headquarters.
In anticipation of the trend, Financial Planning magazine put together a list of the 12 most affordable housing markets for first time home buyers, compliments of research conducted by NerdWallet.
First-time buyers “typically have lower incomes and a shorter credit history, which means they don’t often qualify for the best mortgage rates” and can’t afford as expensive a home, says NerdWallet.
But that needn’t price them out of the real estate market. Far from it. The top cities on the list offer affordable housing that’s within reach of average workers in the 25- to 44-year-old demographic. For example, Pittsburgh – now a hotbed of healthcare, IT and financial services – has starter homes priced at less than three times average salaries. Compare that to homes selling for twelve times average salaries in California metro areas.
So what cities take the affordability prize? Here’s the top twelve contenders, ranked from #1 Pittsburgh to #12 Indianapolis. You can check out the entire list and research data here.
- St. Louis