While the national housing market grapples with a median home price of $425,000 and mortgage rates hovering around 6.82%, several metro areas still offer relative affordability for prospective buyers.
According to Realtor.com’s September Housing Market Report, Pittsburgh leads the pack with a median list price of $245,000, followed by Detroit at $277,000, Buffalo at $277,450, Rochester at $282,500 and St. Louis at $299,900. Those markets in the Northeast and Midwest represent savings compared to the national median.
Don’t Miss:
“For those that are feeling a little depressed about the state of the housing market in the U.S., it’s not chaos everywhere,” Ralph McLaughlin, senior economist at Realtor.com, said to CNBC. “There are isolated pockets of places that still remain relatively affordable on a national perspective.”
An example is Rochester, ranked 18th among September’s hottest housing markets. Despite a 13% year-over-year increase in list prices, the city’s median remains $143,000 below the national average.
“It’s a purely supply-demand imbalance in action,” James Yockel, CEO of the Greater Rochester Association of Realtors, explained to Realtor. “We have seen consistent under-building for the last 20 years.” New construction in Monroe County, where Rochester is located, has plummeted from roughly 1,600 building permits annually in the early 2000s to just 400 today.
Trending: Unlock the hidden potential of commercial real estate — This platform allows individuals to invest in commercial real estate offering a 12% target yield with a bonus 1% return boost today!
New York’s tax structure plays a role in maintaining relatively lower home prices. “Basically, a household has an amount of money they can spend on housing in their budget,” Yockel said. “In New York, a higher percentage of that budget goes to taxes, so they have less to pay for the actual home, which moderates price increases.”
The affordability of those markets stems partly from historical economic trends. “These are all places that over the last 30, 40, 50 years have seen a downward trend in job growth and population growth,” McLaughlin said to CNBC. “That tends to put downward pressure on prices, either causing prices to fall outright or at least to grow much more slowly than the rest of the country.”
