With real estate prices at an all-time high, it's unsurprising that finding somewhere affordable to live is the top priority for many first-time homebuyers. And while a home's asking price is certainly one of the biggest considerations, many other hidden costs come into play. To help shed light on the larger financial burden, HomeBuyer, a mortgage company for first-time home buyers, analyzed the 800 largest U.S cities recognized by the Census Bureau across four categories: mortgage payment, property taxes, transportation expenses, and home insurance costs. Keep reading to find out the 10 cities where they say buying a house is most affordable based on monthly expenses.
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Here's how HomeBuyer conducted their research.
ShutterstockTo arrive at their findings, the research team at HomeBuyer "built an algorithm that digests public and private homeowner data and calculates the relative cost of homeownership throughout the United States." From there, they assigned a score to each city based on the four categories and their monthly payments. Only cities with a population of 50,000 or more were included in the survey.
When figuring out the overall mortgage payment, HomeBuyer used the conventional 30-year fixed-rate mortgage (considered the most common one for first-time home buyers) and "assumed the minimum 3 percent down payment allowed" under most common first-time homebuyer programs. They then "assigned a 6 percent mortgage rate to the conventional loan."
The team also analyzed home insurance costs by averaging "city-wide data using publicly-available results from Insurance.com based on dwelling coverage of $200,000 with a $1,000 deductible and an accompanying personal liability policy for $100,000 in damages."
Next, property taxes were determined based on the median listing price multiplied by the city’s local tax rate.
Lastly, to find out transportation costs, HomeBuyer used The Center for Neighborhood Technology’s H+T Index, which they say represents "the average total cost of household transportation," including the costs of owning and driving a vehicle, as well as public transportation costs.
With all of these data points considered, here are the 10 cities they deem most affordable to buy a house right now.
10 | Pontiac, Michigan
Jacob Boomsma/ShutterstockMonthly home ownership cost: $2,237
Relative affordability: 99.03%
Pontiac, Michigan, a suburb in Northern Detroit, is currently experiencing an "economic renaissance," HomeBuyer says. The study shares that the city has seen a recent increase in new jobs and housing, in addition to improvements like repaved sidewalks and updated community areas.
9 | Lansing, Michigan
ShutterstockMonthly home ownership cost: $2,184
Relative affordability: 99.18%
Lansing is the second of four cities in Michigan to make the top 10. The team at HomeBuyer describes Lansing as "a progressive city with lots of amenities." It's affordable, within driving distance of three of the Great Lakes, and about two hours by car to other bustling spots like Detroit, Grand Rapids, and Ann Arbor.
8 | Springfield, Illinois
Paul Brady Photography / ShutterstockMonthly home ownership cost: $2,168
Relative affordability: 99.22%
Residents of Springfield, Illinois get to enjoy the big city lifestyle without the high prices. With monthly insurance costs and property taxes both under $200, it's not a surprise to see this city on the list. In addition to being affordable, Springfield is home to above-average school districts, notes the study.
7 | Canton, Ohio
benkrut/iStockMonthly home ownership cost: $2,160
Relative affordability: 99.25%
As the first of two cities in Ohio in the top 10, Canton is certainly affordable. It's full of parks, museums, and other activities that will keep you busy, and it's also less than two hours away from Cleveland and Columbus. Canton's average monthly property taxes and insurance costs are both around $150.
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6 | Syracuse, New York
Paul Brady Photography / ShutterstockMonthly home ownership cost: $2,065
Relative affordability: 99.51%
Syracuse, New York, the only location in the Northeast to make it on this list, is perhaps best known for its college atmosphere. While property taxes are the highest on the list at an average of $246 a month, the other costs balance out the total.
The study notes that the demand for housing in Syracuse is high, so if you find a home you love, it's best to purchase it as soon as possible.
5 | Toledo, Ohio
ShutterstockMonthly home ownership cost: $1,955
Relative affordability: 99.82%
From the Great Lakes to museums and historic sites to outdoor events, Toledo is a great spot for first-time homeowners.
"Early into COVID-19, Toledo experienced a home-buying frenzy that pushed home prices higher across the city," explains HomeBuyer. "As normalcy returned, so has the local market."
4 | Flint, Michigan
Jacob Boomsma/ShutterstockMonthly home ownership cost: $1,951
Relative affordability: 99.83%
In comparison to other U.S. cities, Flint, Michigan is one of the most inexpensive when it comes to buying a home. In fact, it has the lowest average monthly mortgage payment on the list—$738.
HomeBuyer also shares that, "in recent years, Flint has undergone a significant revitalization, with new businesses and developments popping up across the city."
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3 | Gary, Indiana
ShutterstockMonthly home ownership cost: $1,931
Relative affordability: 99.89%
Gary, Indiana rounds out the top three most affordable cities to buy a house due to its low property taxes, averaging just $97 a month. In addition to low costs, "vacancy rates for MLS-listed homes in Gary exceed national averages, which reduces bidding wars among first-time buyers," notes the team at HomeBuyer.
2 | Detroit
ShutterstockMonthly home ownership cost: $1,921
Relative affordability: 99.92%
Transportation costs in Detroit may be high, but the city has the second-lowest average monthly mortgage payment—$771. According to the study, "the city’s median household income is above average compared to other cities," so you'll get the most out of your budget.
1 | Macon, Georgia
Sean Pavone / ShutterstockMonthly home ownership cost: $1,892
Relative affordability: 100%
Macon, Georgia takes the number one spot as the most affordable city to buy a house. Of note, their $94 monthly property taxes are the lowest average on the list.
The city is home to Mercer University, and the study points out that the school gives $20,000 to employees who want to purchase a home in College Hill. Macon also has "local home buyer incentive programs that include down payment assistance and property tax freezes for historic properties," they say.
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