May/June 2023 Edition

Marketpulse Data: The Most Affordable Cities In 2023

Home prices surged over the last few years during the COVID-19 pandemic, with the median sales price skyrocketing from $313,000 in Q1 2019 to $436,800 in Q1 2023. While prices may be starting to lower in some parts of the country this year, interest rates have rapidly climbed. For example, the average 30-year fixed mortgage rate shot up from a historic low of 2.65% in January 2021 to 6.39% in May 2023.

With the combination of inflated prices and high interest rates in play, many consumers may wonder if they can even afford to buy a home. Fortunately, owning real estate in some cities is much less expensive than others.

“2023 will be a transition year to a more normal marketplace for housing, however, it will likely remain inflated because of inflation in materials and labor. There is still a huge demand for housing at the bottom of the pricing sector,” said J. David Chapman, Ph.D., Owner/Broker at Realty1, LLC. “We will see less pricing increases at the top of the pricing sector. The middle sector will become more normal. So, the narrative is really 3 separate markets. The bottom will remain less affordable and tough to buy, the middle will normalize, and the higher-priced homes will likely be bargains.”

In order to determine the most affordable cities for home buyers, WalletHub compared 300 U.S. cities across ten key metrics. The data set ranges from the costs of homes and their maintenance to tax rates and vacancy rates.

Here’s what they found:

Source: WalletHub