Affordable housing is already rare in this cutthroat housing market, and finding a reasonably priced property in a city with promising job prospects can seem impossible.
But 16 US cities fit that bill, according to a Business Insider analysis of data from Realtor.com and The Wall Street Journal. The two companies teamed up to release a ranking of the best housing markets for the summer in late July, based on factors including cost of living, the local job market, and various quality of life measures.
The frustrating affordability paradox
The median price of a typical U.S. home in June was $445,000, the same as a year ago, Realtor.com reported last month. While real estate prices are no longer skyrocketing, they remain high, as are mortgage rates, making home affordability a major, long-standing problem.
According to a WSJ/Realtor.com survey, in more than two-thirds of the 50 largest U.S. cities, households earning less than $100,000 a year cannot purchase a typical home, shutting many would-be buyers out of the housing market.
High property prices are hurting home sales, with the National Association of Realtors recently finding that real estate transactions in June were down 5.4% compared with 2023 levels.
Home prices haven’t fallen as demand slowed because supply remains constrained: Housing inventory is about 32% lower than it was before the pandemic, according to the WSJ/Realtor.com survey, though that percentage has risen to nearly 52% in the top 20 cities in the report.
“Limited inventory has increased competition, putting upward pressure on prices across the country,” wrote Hannah Jones and Danielle Hale of Realtor.com, who wrote the report. “High-demand, affordable housing markets, like those featured in The Wall Street Journal/Realtor.com Housing Market Rankings list, are seeing prices rise, especially compared to pre-pandemic prices.”
To that end, the economic researchers noted that home prices in the top 20 markets are up 45% since 2019, compared with a still-stunning 39% increase in the U.S. overall. Home prices in these standout cities are also up 6% from last year, while prices in the rest of the U.S. remained flat.
Herein lies the affordable housing paradox: buyers looking for affordable housing flock to cheaper markets. And that surge in demand drives up real estate prices, making homes harder to come by.
“In recent years, less expensive urban areas have thrived relative to more expensive areas as buyers sought out affordable neighborhoods with attractive lifestyle amenities,” Jones and Hale wrote. “However, the popularity of these affordable markets has driven up prices, somewhat eroding their affordability.”
Housing supply is becoming less of an issue in the major markets surveyed, with inventory increasing from a year ago, but only 35% of markets saw supply grow at an above-average pace.
Yet affordable homes in attractive markets are snapping up quickly, with homes on the market for just one month on average, less than two weeks shorter than the national average.
16 markets with affordable housing and abundant jobs
In addition to obvious factors like price, potential homebuyers should be sure to consider the job market they’ll be entering, unless they’re constantly working remotely.
Business Insider found that there are dozens of cities where the median home price is below the national average of $445,000 and the unemployment rate is below the current 4.1%. The dataset used for the analysis was the same as that used in the WSJ/Realtor.com report: the 200 most populous metropolitan areas based on the most recent U.S. Census Bureau data.
In this group, there were 16 real estate markets where home prices were at least $150,000 lower than the national average and unemployment rates were 4% or lower. Below are those cities and each market’s median home price in June, savings compared to the national average, unemployment rate, and the difference with the U.S. unemployment rate.
