Least Expensive U.S. Housing Markets Where You Can Buy a Home Today

First-time and even repeat home buyers find it challenging to locate an affordable house in a desirable area.

Several factors weigh on this, including higher mortgage interest rates, lofty list prices and heavy competition. But the good news is there are less expensive real estate markets with lower-than-average annual earnings required to buy property.

A report from Attom reveals the top 10 most affordable housing markets in the country. Dig deeper to learn why these markets made the list and what to consider before committing to a move to one of these places.

What the ATTOM report found

Attom, a property data provider, conducts a quarterly study to determine the most and least affordable housing markets in the U.S.

The latest report analyzed median home prices sourced from publicly recorded sales deed data and average wage data from the US Bureau of Labor Statistics in 574 American counties with a combined population of 255.5 million people.

Affordability is then gauged for average wage earners by determining the amount of income needed for major homeownership expenses on median-priced homes, assuming a 30-year fixed-rate mortgage and a 20% down payment. Mortgage payments, property taxes, homeowners insurance, and mortgage insurance are among the expenses evaluated.

Here are the top 10 most affordable markets, according to Attom’s Q2 2023 home affordability report.

Analyzing the report

While this list stands out as the biggest silver lining from the report, Attom’s research revealed some alarming trends, including an abrupt jump in home prices across the nation.

“Prices have shot up after three quarters of declines in most of the country, which has helped raise the portion of the average wage needed to afford a typical home nationwide to the highest point since 2007,” said Attom CEO Rob Barber. “The latest patterns have produced a double-edged sword of renewed strength in the market, but also a fallout for households trying to stretch their budgets into a home purchase.”

Barber is commonly asked how long these trends will continue. While it’s hard to predict due to the multiple factors that weigh on it, he pointed out the plausibility for overall home prices to go up in the third quarter of 2023. Barber also noted some positives, like historically low unemployment – under 4% every month over the past year – and consumer price inflation dropping from as high as 9% last year to 3% in June 2023.

“Plus, mortgage rates have been stable this year, despite ticking up a bit in the last month,” he continued. “Meanwhile, the stock market has rebounded after falling in 2022, but the supply of homes for sale around the country remains unusually small. All those forces generate a potential scenario of healthy home buying demand amid tight supply.”

All the greater reason to find an affordable market if you are searching for a house.

Why these markets made the most affordable list

Lindsey Teetor, a consultant with JiT Home Buyers, isn’t surprised by the five states that made the list.

“Pennsylvania, New York, Alabama, North Carolina, and Ohio have certain characteristics that make them more affordable than other areas. For example, Pennsylvania has a lower cost of living than other states, and North Carolina has a lower median home price,” she said.

Aleks Grigoriev, co-founder of Priority Home Buyers, says he has a client who is very happy with his decision to purchase a home recently in Pennsylvania.

“Cambria, Schuylkill, and Fayette Counties offer less costly housing options with relatively low annual wages needed to purchase a home,” noted Grigoriev. “These areas often provide a balance between affordability and proximity to larger cities, making them worthy considerations for homebuyers.”

Ben Gold, founder of Recommended Home Buyers, agrees that each of these areas is list-worthy among bargain hunters.

“These states have a combination of lower housing costs, relatively lower taxes, and more modest living expenses. Additionally, these regions may benefit from local economic dynamics, potential growth opportunities, job prospects, and community amenities – making them relatively cheaper compared to other areas without having to compromise on quality of life,” explains Gold. “

What to consider before moving to a more affordable market

Home price isn’t the only determining factor you should think about when mulling a move to a more affordable area – especially one located out of state.

“It’s important to research the job market and employment opportunities in the area,” recommends Gold. “Also, assess the quality of schools, neighborhood amenities, and community infrastructure, and consider long-term prospects for property value appreciation and potential resale value of your home.”

It’s wise, too, to investigate crime rates, school district quality, access to health care facilities, transportation options, and proximity to amenities like shopping centers and recreational areas.

“Research the area thoroughly and make sure it is the right fit for you,” Teetor advises.

Don’t stop there, however.

“Look into the average utility costs in that area, especially if you are moving to a new climate,” suggests Angelina Keck, a real estate broker in Houston. “What are the state income taxes and property taxes? In addition, check flood maps or data about other natural disasters like landslides or fires, and find out what your homeowners insurance costs will be.”

Your next move

Pulling the trigger on a major relocation to a more affordable market requires due diligence and homework. But it should also involve collaborating closely with trusted professionals.

“I recommend working with a local real estate agent who has expertise in the target market,” Grigoriev said. “They can provide valuable insights, guide you through the process, and help you make more informed decisions.”

It’s also smart to consult with an experienced lending professional, who can suggest mortgage loan financing choices that fit your needs and budget and who can help you determine monthly housing costs that you can afford.