Mortgage

States with the cheapest homes in 2022

States with the cheapest homes in 2022
Written by Publishing Team

Which states have the cheapest homes?

As home prices continue to rise, many potential buyers of existing zip codes are looking for affordable housing.

The good news is that housing prices are not rising at the same pace everywhere.

If you’re looking for affordable homes in 2022, the South, Southeast or Midwest might be your best bet. Some states have appeared frequently to have some of the cheapest homes on the market, including Texas, Florida, Tennessee, Ohio and Michigan. And they are not alone.

Finding a cheap home in 2022 requires some research and flexibility. But this is not impossible. Here’s what you should know.

Check your home purchase eligibility. START HERE (Jan 11, 2022)


In this article (go to…)


Consider looking for affordable housing

If the real estate market is hectic in your current area, it often makes sense to look at different cities or states where housing is cheaper. This may help you get a home and start building equity much sooner than you ever imagined.

“The good news is that there are jobs available almost everywhere across the country today, and many people can now work from home. This makes it possible for people to consider moving almost anywhere to find a home that they can comfortably afford,” he says. says Rick Sharga, Executive Vice President of RealtyTrac.

“A home is considered affordable if housing expenses do not take up more than 30% of the owner’s or family’s monthly budget.”

According to Gay Cororaton, chief economist and director of housing and business research at the National Association of Realtors (NAR), a home is considered affordable if housing expenses do not take up more than 30% of a household’s budget.

This is because the family has other basic expenses – food, clothing, education, health, student debt, entertainment, and savings for retirement. If homebuyers are unable to pay the mortgage, they may end up losing their home, including savings used for the down payment,” she says.

Wondering where you can find those affordable, legendary homes? Here are some suggestions.

Check your home purchase eligibility. START HERE (Jan 11, 2022)

Hidden gems in the real estate market

In its latest report, Housing Market 2022 The Hidden Gems, NAR ranks the top 10 markets with strong housing market fundamentals but where housing prices remain undervalued and relatively inexpensive.

These areas are expected to see more price hikes this year – so buyers who enter earlier may benefit the most.

The hidden gem markets in NAR, in alphabetical order, are:

  1. Dallas-Fort Worth, Texas
  2. Daphne Fairhope Farley, Alabama
  3. Fayetteville-Springdale-Rogers, Arkansas-Missouri
  4. Huntsville, Alabama
  5. Knoxville, Tennessee
  6. Palm Bay – Melbourne – Titusville, Florida
  7. Pensacola Ferry Pass, Brent, Florida
  8. San Antonio – New Braunfels, Texas
  9. Spartanburg, South Carolina
  10. Tucson, Arizona

“Basically, these are markets where prices are still affordable, based on the price of a home to wage income ratio, and which have strong market conditions such as job and wage growth,” Kuroraton says.

“In these markets, home prices are three times or less than median household income. Compare that to an area like San Francisco, San Jose, or Los Angeles where home prices are seven times the income level.”

She points to Tucson as an especially good buzz for your business.

“Tucson is affordable compared to Phoenix. As of the second quarter of 2021, the median property value was $261,046, which is three times the median household income compared to the median property value in Phoenix—which is $364,186 , i.e. 4.3 times the median household income,” Cororatun adds.

Big cities with the cheapest homes

Based on a recent report from ATTOM, several large metro areas are still within range of many potential buyers – although lower in this newer study than in previous ATTOM studies.

In fact, of the 575 counties in the report, only 135 (23%) are more expensive than historical affordability averages in the fourth quarter of 2021.

“According to this report, there are several large metro areas that are still within reach of most home buyers,” explains Sharga. These include:

  1. Chicago, Illinois
  2. Houston, Texas
  3. Dallas, Texas
  4. San Antonio, Texas
  5. Detroit, Michigan
  6. Philadelphia, Pennsylvania
  7. Cleveland, Ohio
  8. Columbus, Ohio

“Homes are also relatively affordable in smaller metro areas such as Allentown, Pennsylvania; Decatur and Peoria, Illinois; and Macon, Georgia. In all of these cities, homeownership expenditures are typically less than 28% of monthly local wages,” Sharga adds.

This last point is important because what the buyer can afford will depend as much on his income and the cost of financing as it does on the list price of the house.

“In some markets, home prices can be much lower than national averages, but local wages can be lower. So buyers really need to make a careful assessment of their financial conditions as well as home prices before going ahead with the purchase,” recommends Sharga.

Check your home buying budget. START HERE (Jan 11, 2022)

Another snapshot of the cheapest cities

These are not the only classifications to consider carefully. Other sources publish affordable market listings as well. (Although many of the same states appear over and over again.)

For example, mortgage lender Better recently published its list of the 10 most affordable cities in America:

  1. Knoxville, Tennessee
  2. Memphis, Tennessee
  3. Kalamazoo, Michigan
  4. Jacksonville, Florida
  5. St. Louis, Missouri
  6. Columbus, Ohio
  7. Oklahoma City, Oklahoma
  8. Vegas, Nevada
  9. Buffalo, New York
  10. San Antonio, Texas

“It is important to look at the cost-of-living index for a specific market or city, which provides a snapshot of the cost of everyday goods and services, including the price of a gallon of milk, a visit to the doctor, and more,” notes Christian Wallace, president of real estate services for Better.

“As you can imagine, the cost of living can vary greatly from place to place. Since more affordable homes require smaller down payments, it is not surprising that many people are interested in finding cities where the dollar goes further.” .

Tips for buying a cheap home

Finding an affordable home is only part of the process. You also need to secure financing, accept your offer and close the deal.

Do you want to improve your odds of success at every stage of the home buying process? Follow these tips from the experts.

1. See further from the city center

A large part of finding affordable homes comes down to geography. As a general rule, the further away from the city center, the more affordable homes will usually be,” advises Shargha.

“Likewise, the further away from coastal areas or other areas of high demand, the lower the prices,” he adds. “Newer homes tend to be more expensive than older homes as well, so looking inside more mature and established areas may help.”

2. Find a great real estate agent

Local agents and real estate brokers can help you identify areas within the market that may be more affordable than others.

“Many buyers start their search virtually and on their own, but you really need a realtor who can help you navigate the home search and purchase process – an expert who can help you make a good price quote given their knowledge of market conditions in the area,” says Cororatun.

To learn more about choosing a buyer’s agent, read 6 tips for finding a great real estate agent.

3. Consider the fixing upper

Don’t be afraid to consider the entry-level characteristics and the upper stabilizer, too.

“Stabilizer uppers can be a good way to buy a home at a discount, and loan programs such as the FHA 203K loan will allow repair costs to be included in the mortgage, thus reducing your out-of-pocket cash requirements,” Sharga suggests.

4. Don’t forget property taxes

Real estate taxes are another key factor to consider.

Keep in mind that most homeowners are subject to their property taxes on their monthly mortgage payments. So your tax rate can have a huge impact on your home buying budget.

“Property taxes vary by city, county, and state. Lower property taxes give you more wiggle room to buy a home at a higher price, Wallace adds.

5. Choose your mortgage carefully

Shopping carefully for the right mortgage can also make a big difference.

“Comparing different lenders and loan programs allows you to see a range of loans that you may be eligible for and gives you the best chance of finding a lower interest rate, which can lower your acquisition and ownership costs,” Wallace continues.

There can be a huge difference in mortgage rates from one bank to another. And your rate will determine your monthly interest payment, which affects the total amount you can borrow. So finding the lowest rate will not only save you money from month to month; It can actually help you buy a more expensive home, too.

6. Find down payment and help close the cost

Remember to pursue Buyer Assistance Programs if you are eligible and available. Every state has advance payment assistance programs that can help you get the cash needed for home insurance. Take a closer look at these resources:

bottom line

Keep in mind that mortgage rates will likely continue to rise for the next several months as the Federal Reserve controls inflation once again.

“Also, don’t expect housing prices to go down, given the significant infrastructure construction in the housing market,” Kuroratun adds. “Housing prices will continue to rise, albeit at a slower pace this year.”

These are other reasons to look closely at more affordable areas across the country, even if it requires getting out of the state.

“If you can buy a home now and you’re in your life cycle where you’re considering buying, don’t put off buying if that’s possible,” says Kuroraton.

Check the new price (Jan 11, 2022)

About the author

Publishing Team

Leave a Comment