Homefinding Book

by: Homefinding Book (442)

With property prices dropping, first-time buyers might start celebrating. But is property really becoming more affordable? Lenders have been stung by the cheap borrowing over the last decade and now mortgage companies have become far more selective about who they lend to and are no longer prepared to give the low interest rates and 100% mortgages. In fact, to get a decent deal you now have to have a decent deposit of around 20% or more. Deposits are hard enough to get your hands on but with the cost of living rising sharply it is even harder to save in the first place. For those already on the property ladder, they are likely to have seen the price of their house price and home equity decrease.

For tenants who may think they are safe: rents are actually increasing as mortgages and living costs rise – landlords need to make more from their property. There are a growing number of tenants and fewer properties to rent as more and more people are putting off a home purchase and as landlords increase rents.

However it isn’t all doom and gloom. For those of us who saved while times are good, we can still avail of good mortgage deals. Those who brought there houses a long time ago are unlikely to fall into negative equity due to the phenomenal rise in house prices over the last decade.

There is also good news. Each state has its expensive and more affordable areas: a house which might cost $1 million in one area might be 100,000 cheaper in another. More than that, It is very important in the current trends to check out the market carefully, some areas are still rising and certain areas are dropping faster or more than others. Also, some areas are cheap but low house prices don’t make the area affordable, jobs may be few with low incomes. So where are the most affordable locations to live (in no particular order)?

Note: Average house prices that are double the yearly average income make the housing affordable.

Indianapolis, Indiana
Average house price – $112,500
Average income – $60,383
% of housing for sale that is affordable – 89%

Cleveland, Ohio
Average house price – $122,900
Average income – $57,472
% of housing for sale that is affordable – 82%

Detroit, Michigan
Average house price – $154,600
Average income – $63,052
% of housing for sale that is affordable – 80%

Pittsburgh, Pennsylvania
Average house price – $109,000
Average income – $54.872
% of housing for sale that is affordable – 76%

Cincinnati, Ohio
Average house price – $136,800
Average income – $60.146
% of housing for sale that is affordable – 78%

St Louis, Montana
Average house price – $134,400
Average income – $59.950
% of housing for sale that is affordable –77%

Atlanta, Georgia
Average house price – $170,400
Average income – $63,484
% of housing for sale that is affordable – 69%

Greensborough, North Carolina
Average house price – $145,100
Average income – $50,447
% of housing for sale that is affordable – 71%

Dallas, Texas
Average house price – $145,500
Average income – $58,738
% of housing for sale that is affordable – 57%

Austin, Texas
Average house price – $176,200
Average income – $65,739
% of housing for sale that is affordable – 56%