Study: Most Cities Have Become More Affordable This Year

November 25, 2019

After years of escalating home prices, 81% of major U.S. metros have become more affordable this year, according to a new realtor.com® study. “Mortgage rates are much lower than they were, and incomes have actually grown this year for most Americans," says George Ratiu, realtor.com®'s senior economist. "Those two things combined have led to an improvement in affordability for home buyers.”

Affordability is rising the most in mid-sized cities, particularly in the Midwest and South. The areas tend to have strong economies and job markets and a large supply of homes on the market, realtor.com® reports. Researchers evaluated home prices and local household income in the 100 largest metro areas for the third quarter of this year. They calculated an affordability score for each metro.

Allentown, Pa., topped realtor.com®’s list of cities that have become more affordable. The former steel town is seeing lower real estate prices compared to a year ago; the city's median price of $224,950 is 38.7% less than the national median of $312,000. Middle-income buyers in Allentown can afford 59% of the properties for sale. The town is attracting new residents from pricier places like New Jersey or Washington, D.C., realtor.com® notes.

The following seven cities that have gained the most affordability this year are:

Allentown, Pa.

  • Median list price: $224,950
  • Percentage of homes available at the median income: 59%
  • Annual change in affordability score: 0.14

Des Moines, Iowa

  • Median list price: $262,350
  • Percentage of homes available at the median income: 56%
  • Annual change in affordability score: 0.13

Atlanta

  • Median list price: $321,100
  • Percentage of homes available at the median income: 41%
  • Annual change in affordability score: 0.12

Minneapolis

  • Median list price: $339,950
  • Percentage of homes available at the median income: 46%
  • Annual change in affordability score: 0.11

San Francisco

  • Median list price: $940,000
  • Percentage of homes available at the median income: 18%
  • Annual change in affordability score: 0.11

Omaha, Neb.

  • Median list price: $279,300
  • Percentage of homes available at the median income: 41%
  • Annual change in affordability score: 0.10

Charlotte, N.C.

  • Median list price: $335,300
  • Percentage of homes available at the median income: 32%
  • Annual change in affordability score: 0.10