These Are The Most Affordable Cities In America To Buy A Home

What’s the most affordable major city in America to buy a home? Cleveland? Detroit? Houston?

According to a new report by Unison, it’s Kansas City.

The Unison Home Affordability Report 2017 cross-referenced 2015 U.S. Census and publicly available property data with Unison’s proprietary models to estimate the number of homes that are affordable with the median income in various cities. To calculate affordability, the report assumed a 10 percent or 20 percent down payment with associated monthly costs, at a 4 percent mortgage interest rate on a 30-year fixed-rate mortgage, with a maximum allowable DTI ratio of 45 percent.

The report focused on 25-44 year olds because they make up the bulk of first-time homebuyers. “It is important to focus on first-time homebuyers because this is the group that is trying to get into the housing market while overcoming the many hurdles in their way,” the report said.

Which Cities Are The Most (And Least) Affordable?

Some takeaways from the report, according to Unison:

• Unsurprisingly, San Francisco is the least affordable city in the U.S.

Only 1.4 percent of homes are within reach of those who earn the median income in this age group. With a 10 percent down payment, the median household can afford 1 percent of homes, and that number only jumps to 3 percent with a 20 percent down payment.

• The Midwest offers much greater affordability

In keeping with the trend, the Midwest is a much more affordable place to live. Midwest metropolises like Chicago, Denver, Dallas, San Antonio, Minneapolis and Salt Lake City all have at least two-thirds of their homes affordable by the middle class.

• Coastal cities can’t be painted with one brush

Just as the midwest is known for being more affordable, you’d think the coastal cities would have low affordability across the board: but that’s not the case. Cities like Los Angeles, New York, Boston, Seattle, and Portland had median income affordability anywhere from 16 percent to 52 percent.

The Size Of Your Down Payment Matters

The report also looked at affordability differences based on down payments of 10 percent and 20 percent. According to the data, it really makes a difference.

Across the board affordability jumps when you put down 20 percent. Affordability just about doubles in Los Angeles and New York with a heftier down payment, and goes from 38 percent to 52 percent in Seattle.

See Where Your City Falls on the List

Here are the affordability numbers for each city in the report:

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