Home > Mortgages > The Most Affordable Places to Buy a Home in America

Comments 1 Comment

Determining the affordability of living in a certain place involves a lot of variables, but the make-or-break expense tends to be how much it actually costs to have an address there — that is, what rent or mortgage payments are.

One of the ways to calculate home affordability is to look at the average income in that area and see how the average mortgage payment in the same area compares. (Try our Home Affordability Calculator to see how your credit can impact how much house you can afford.)

Nationwide, the mortgage payment on an average-priced home in the U.S. (assuming a 3% down payment and including homeowners insurance, private mortgage insurance and property taxes) takes up 36.5% of the average wage in the first quarter of 2015, according to a quarterly analysis from housing data company RealtyTrac.

That’s an improvement from 37.4% at the same time last year, but a mortgage payment requires more of monthly wages than it did in the first quarter of 2013, when it took up 33.5% of homeowners’ income.

In some places, the average monthly mortgage payment takes up much more of consumers’ paycheck. For example, the average mortgage payment for a home in Eagle County, Colo., was 138.5% of the average income there in the first quarter. That made it the least affordable place to buy a home early this year (Eagle County includes resort town Vail and the White River National Forest), followed by Kings County, N.Y., (aka Brooklyn, where you need 126.3% of the average income to afford the monthly mortgage payment on an average-priced home) and Marin County, Calif., (San Francisco metro area, 119.3%).

In most of the country (68% of counties), home price appreciation has increased at a faster rate than wage growth between the first quarter of 2014 and the first quarter of 2015, but mortgage rates have fallen in that same period of time, improving home affordability in most of the country.

Should interest rates rise (and wage growth and home price appreciation remain constant), home affordability will drop. This is a big issue facing aspiring homeowners, as many experts anticipate interest rates rising in the next several months. Your credit score has a huge impact on what interest rate you’ll get on a mortgage, which is why it’s important to check your credit before you buy a house (or start looking). You are entitled to a free copy of each of your credit reports annually from AnnualCreditReport.com and you can check your credit scores for free each month on Credit.com.

Even with decreased home affordability on the horizon, there are many places where it’s considered quite cheap to buy a house. Here are the 10 counties with the most affordable homes, according to RealtyTrac’s Q1 2015 analysis.

10. Cuyahoga County, Ohio
Metro area: Cleveland (includes Cleveland proper)
Affordability (portion of average income it takes to make a mortgage payment on an average priced home): 13.7%

9. Roane County, Tenn.
Metro area: Knoxville, Tenn.
Affordability: 12.1%

8. Clayton County, Ga.
Metro area: Atlanta
Affordability: 11.3%

7. Darlington County, S.C.
Metro area: Florence, S.C.
Affordability: 10.8%

6. Wayne County, Mich.
Metro area: Detroit (includes Detroit proper)
Affordability: 10.6%

5. Fairfield County, S.C.
Metro area: Columbia, S.C.
Affordability: 10.3%

4. Lake County, Ind.
Metro area: Chicago
Affordability: 9.5%

3. St. Louis City
Affordability: 9.4%

2. St. Louis County, Mo.
Metro area: St. Louis
Affordability: 8.3%

1. Hamilton County, Florida
Metro area: None
Affordability: 5.6%

More on Mortgages & Homebuying:

Image: Stockbyte

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

  • heavyw8t

    I can’t speak to the rest of the areas you mentioned, but Cuyahoga County is that affordable for a reason. The crime is out of control in Cuyahoga County. Cleveland and the surrounding areas are just out of control and there is no end in sight. You can buy cheap houses in Cleveland, but I highly advise against living there. I came from Cleveland and watched it deteriorate. I suspect similar conditions in the other 9 areas as well. Housing is cheap for a reason.

Credit.com receives compensation for the financial products and services advertised on this site if our users apply for and sign up for any of them.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team