Homebuyer Havens: The Most Affordable Cities to Buy a House

For many, cheaper doesn’t necessarily mean worse. 

Despite the widespread economic hardship over the last year, many Americans are still in the market to purchase a home. In fact, nearly 850,000 homes were sold in 2020, up about 18.8 percent since the previous year, according to the United States Census Bureau. Clearly, the housing market has remained resilient amidst the continuous economic repercussions of the pandemic, and it and shows no signs of slowing in 2021.

Buying a house is typically the most expensive purchase we make in our lifetime. Unfortunately, Americans tend not to be very strategic at choosing the appropriate home based on their finances, setting their sights well above their means. More than half of first-time homebuyers are now planning to purchase homes with less than a twenty percent down payment, and about a quarter are planning to do so with less than a ten percent down payment, according to Business Insider. By paying less than the recommended twenty percent, these new homeowners set themselves up for higher interest rates, significantly increasing the burden of their monthly mortgage payments on their finances.

However, in some cities, homes tend to sell at much more affordable price points than in others. To identify the cities with the most affordable housing markets this year, the data science team at Insurify referred to national real estate data. In these cities, making more than the minimum down payment is not only feasible but is also considerably easier than in the rest of the country. Moreover, many of these cities boast a good quality of life and solid education systems. Likely undervalued at present, many of the home markets in these 20 cities are rich with long-term growth potential.

Heat map of the top 20 most affordable cities to buy a home in the United States

Insights 

  • National averages. As of January 2021, the median listing price of a home in the United States was $346,162. Compared to January 2020, when the median listing price of a home was only $300,045, this represents a 15.37 percent increase year over year. For homes, the average listing price per square foot in the United States is $166.25 as of January 2021, compared to $141.50 in January 2020. Homes are also remaining on the market in 2021 for significantly fewer days compared to last year, indicating increased demand for homes across the board: whereas the average home lasted 85 days before being sold in January 2020, it now lasts only 76, as of January 2021. This represents an 11.11 percent decrease since last year.  
  • High demand for homes in these cities, with few exceptions. There is a significant variation in housing market demand among a few of these top twenty cities. In fact, while homes in three of the twenty cities remain on the market over 500 days before being sold, homes in the remaining seventeen cities sell much faster, remaining only 63 days (17 percent lower or than the national average of 76 days). With the exception of the three outlying cities, it’s clear that America’s most affordable cities to buy a home are also quite appealing to homebuyers. 
  • Most expensive cities to buy a home. On the opposite side of the spectrum are those cities where the average home is sold for among the highest prices in the nation. The three cities with the highest home prices are Santa Maria, California; Napa, California; and Salinas, California, where the average home sells for $2,523,883, $1,354,367, and $1,264,717, respectively, as of January 2021.  

 

Methodology

The data scientists at Insurify, a site where users can compare home insurance quotes, referred to real estate data gathered from Realtor.com to determine the cities with the most affordable housing markets. Specifically, they evaluated cities based on Realtor.com’s housing market data to determine which reported the lowest median listing price per house. To account for fluctuations month to month, the data scientists at Insurify took the median listing price for each city over the most recent three months and averaged it, then used these averages to identify the top 20 cities with the most affordable houses on the market.

Median days on market and median price per foot in each of the top 20 cities were also gathered from Realtor.com. These values were also calculated as an average of the data from the past three months in order to account for fluctuations in the data month to month. 

In this study, cities were defined based on the United States Census Bureau’s classification of an “urbanized area,” an urban area with a population over 50,000. 

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What is the Cheapest City to Buy a House?

Muncie, Indiana. Muncie is the most affordable city to buy a new home, according to Insurify’s analysis of housing market data. The median home listing price in Muncie is $85,217, which is 75.4% below the national average.

The Top 20 Most Affordable Cities to Buy a House, 2021 

20. Akron, Ohio

  • Median home listing price: $157,417 (54.5% below national average)
  • Median price per foot: $96.35 (31.9% below national average)
  • Median days on market: 48

19. Waterloo-Cedar Falls, Iowa MSA

  • Median home listing price: $156,067 (54.9% below national average)
  • Median price per foot: $118.83 (31.9% below national average)
  • Median days on market: 60

18. Wichita Falls, Texas

  • Median home listing price: $149,850 (56.7% below national average)
  • Median price per foot: $86.69 (38.7% below national average)
  • Median days on market: 55

17. Davenport, Iowa

  • Median home listing price: $148,317 (57.2% below national average)
  • Median price per foot: $97.24 (31.3% below national average)
  • Median days on market: 548

16. Topeka, Kansas

  • Median home listing price: $147,383 (57.4% below national average)
  • Median price per foot: $97.24 (31.3% below national average)
  • Median days on market: 36

15. Albany, Georgia

  • Median home listing price: $146,433 (57.7% below national average)
  • Median price per foot: $85.46 (39.6% below national average)
  • Median days on market: 66

14. Jamestown-Dunkirk-Fredonia, New York MSA

  • Median home listing price: $144,950 (58.1% below national average)
  • Median price per foot: $89.48 (36.8% below national average)
  • Median days on market: 77

13. Huntington-Ashland, West Virginia-Kentucky MSA

  • Median home listing price: $139,833 (59.6% below national average)
  • Median price per foot: $79.81 (43.6% below national average)
  • Median days on market: 81

12. Springfield, Ohio

  • Median home listing price: $138,983 (59.9% below national average)
  • Median price per foot: $81.63 (42.3% below national average)
  • Median days on market: 49

11. Erie, Pennsylvania

  • Median home listing price: $138,433 (60.0% below national average)
  • Median price per foot: $91.79 (35.1% below national average)
  • Median days on market: 72

10. Youngstown, Ohio

  • Median home listing price: $135,967 (60.7% below national average)
  • Median price per foot: $60.57 (57.2% below national average)
  • Median days on market: 66

9. Springfield, Illinois

  • Median home listing price: $131,067 (62.1% below national average)
  • Median price per foot: $82.29 (41.8% below national average)
  • Median days on market: 554

8. Kokomo, Indiana

  • Median home listing price: $129,667 (62.5% below national average)
  • Median price per foot: $79.51 (43.8% below national average)
  • Median days on market: 50

7. Bloomington, Illinois

  • Median home listing price: $122,367 (64.7% below national average)
  • Median price per foot: $79.07 (44.1% below national average)
  • Median days on market: 97

6. St. Joseph, Missouri

  • Median home listing price: $119,765 (65.4% below national average)
  • Median price per foot: $74.15 (47.8% below national average)
  • Median days on market: 54

5. Peoria, Illinois

  • Median home listing price: $114,163 (67.0% below national average)
  • Median price per foot: $73.82 (43.6% below national average)
  • Median days on market: 66

4. Lawton, Oklahoma

  • Median home listing price: $109,783 (68.3% below national average)
  • Median price per foot: $71.25 (49.6% below national average)
  • Median days on market: 62

3. Decatur, Illinois

  • Median home listing price: $99,433 (71.3% below national average)
  • Median price per foot: $60.73 (57.1% below national average)
  • Median days on market: 666

2. Terre Haute, Indiana

  • Median home listing price: $96,667 (72.1% below national average)
  • Median price per foot: $66.32 (53.1% below national average)
  • Median days on market: 65

1. Muncie, Indiana

  • Median home listing price: $85,217 (75.4% below national average)
  • Median price per foot: $62.37 (55.9% below national average)
  • Median days on market: 63

 

If you have any questions or comments about this article or would like to request the data, please contact insights@insurify.com.