Most affordable places
The share of homes that are affordable is growing across the country, due largely to lower mortgage interest rates and more homes listed for sale. In 12 markets, at least half of all homes for sale are considered affordable.
Finding a home that fits your needs while leaving money in your pocket to enjoy life can feel like an impossible journey at times. But real estate markets vary widely, and, thanks to the recent decline in mortgage interest rates, the share of affordable homes for sale in nearly all of the nation’s 50 largest metros is larger than it was last year — or even last month.
Ten metros saw double-digit growth in the share of affordable listings in September 2024 compared to a year earlier. And nearly all of the metros saw small gains in affordability compared to only a month earlier, according to a Zillow® analysis.
If buying a home is a priority for you and you’re considering moving, you might want to consider one of these markets.
What makes a home affordable?
The metros on Zillow’s list of most affordable places to live all have one thing in common: The cost of housing consumes less than 30% of a typical household’s budget — in some cases, a lot less.
The rankings are based on a Zillow analysis of metros across the country that takes into account the value of a typical home along with the median household income. Also considered is the monthly mortgage payment needed to buy a typical home if the buyer pays current interest rates and puts 20% down toward the purchase.
These factors combined produce a “mortgage-to-income ratio” — the share of your income that goes toward housing costs. Paying roughly a third of your income toward housing is generally considered affordable as it tends to mean that you have money left for other necessities, to pay down debt and save for the future.
Of course, determining what you can afford when shopping for a home can involve a number of considerations beyond your mortgage-to-income ratio. Read on for tips on determining your price range, and remember you can reach out to a lender if you have questions
The most affordable places to live
First, the big picture: Nationally, more than one in four (27%) active listings were affordable to the typical household in September 2024 — a drop of 12 percentage points from pre-pandemic levels. This is likely a reflection of the run-up in home prices over the past four years, higher interest rates for the better part of two years and the historically low number of homes for sale. Combined, they created an affordability crisis that continues to affect many aspiring buyers.
Still, the overall picture for buyers has improved from a year ago — and even a month ago. Nearly every city analyzed in September 2024 had gains in affordability, some large and some tiny.
Only two of the 50 metros analyzed had fewer affordable listings than last year, and two others had no change in affordability from a year ago. The rest all became more affordable. This is likely due to the drop in mortgage interest rates from their high of about 8% in May 2024, price cuts as we move into the traditionally slower fall selling season, and more competition among sellers (listings in the U.S. are up 22% compared to last year).
Markets where at least half of listings are affordable
In a dozen local markets, half or more of the homes for sale are considered affordable. In the case of Pittsburgh, nearly three in four listings are affordable.