Affordable homes, and plenty of them—isn’t that the dream real estate market for buyers these days? As unlikely as it may seem, these places do exist, if you know where to look. The realtor.com® economics team has identified the top markets where buyers can have their pick of homes that won’t bust their budget.
For the most part, the pandemic that has shut down wide swaths of the country and ravaged the economy has not led to bargain-basement deals on real estate. According to the realtor.com analysis, a historic low in for-sale housing inventory has made buyers’ search for affordable homes more difficult than ever before.
“This is a problem that was existing before the pandemic and in many ways was accelerated by the pandemic,” says realtor.com’s chief economist, Danielle Hale.
“Affordability has improved slightly, but it’s such a slight improvement that many people may feel like it hasn’t changed much,” she adds. Although mortgage rates have sunk to record lows, a steady rise in home prices has offset that somewhat.
Using a proprietary affordability score that shows how many home listings in each market are affordable to local buyers, and looking at markets that had at least 10 active listings for every 1,000 households, the realtor.com team found that only three metropolitan markets in the U.S. met their requirements. In an April assessment, there were six.
At the top of the list is Baton Rouge, LA. We’ve noted before that homes are plenty in the Louisiana capital; it made our list of metros where it’s easiest to buy a home, based on listing inventory. We’ve also identified this bayou town as one of the nation’s most affordable markets (median home price in July: $265,000), which may also explain why buyers here offered some of the lowest down payments in the nation.
The second-best metro for affordability and availability is Atlanta (the metro area includes suburbs such as Sandy Springs). Here, a median-priced home will run $350,000. And in No. 3, Jacksonville, FL, a home costing $319,300 is the norm.
Notice a common thread here? Yes, the Southeast dominates because there’s plenty of space (though some complain about Atlanta’s sprawl) and looser regulations on building, both of which mean it’s less costly for developers to put up new housing to meet demand.
“These metros in the South manage to hit the sweet spot” of reasonably priced and relatively plentiful homes, Hale says. And the area tends to be business-friendly as well, luring companies to relocate and bringing their employees and new recruits in turn.
For more information, including the metros where homes aren’t affordable or available, check out the July Affordability Report.