Are you dreaming of owning your own home but feeling discouraged by the skyrocketing prices in major U.S. cities? You’re not alone. According to an April report by Clever Real Estate, only six major U.S. cities have median home prices that a household making the local median income could afford.
The report looked at the income needed to afford a home in major U.S. cities compared to the actual income earned by the typical household. A home was considered affordable if it met the popular 28/36 rule, which advises buyers to spend a maximum of 28% of their monthly income on housing and an extra 8% on other debts like credit card or auto bills.
Even with a 20% down payment, the standard homebuyer making median local pay would not be able to afford a home listed at a middle-of-the-market price in 44 out of 50 major cities. Additionally, high home mortgage rates at the moment could deter sellers from listing homes and buyers from purchasing them.
But fear not, there are still some cities where median earners can afford homes. Let’s take a look at these six affordable cities:
1. Pittsburgh, Pennsylvania
Actual Income: $70,607
Income Needed To Afford The Median Home: $59,919
Local Median Home Sale Price: $199,573
2. Cleveland, Ohio
Actual Income: $65,198
Income Needed To Afford The Median Home: $56,378
Local Median Home Sale Price: $182,652
3. St. Louis, Missouri
Actual Income: $74,531
Income Needed To Afford The Median Home: $66,743
Local Median Home Sale Price: $225,674
4. Memphis, Tennessee
Actual Income: $64,008
Income Needed To Afford The Median Home: $61,659
Local Median Home Sale Price: $213,929
5. Indianapolis, Indiana
Actual Income: $75,824
Income Needed To Afford The Median Home: $73,398
Local Median Home Sale Price: $257,584
6. Birmingham, Alabama
Actual Income: $67,242
Income Needed To Afford The Median Home: $65,216
Local Median Home Sale Price: $235,212