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10 Most and Least Affordable Metros for Homebuying

10 Most and Least Affordable Metros for Homebuying
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Home.com Staff

If nothing else, 2021 was a year of extremes for the housing market. Prices soared to all-time highs while inventory sank to record lows.

This dynamic ate away at housing affordability and sidelined many first-time and low-income homebuyers. As a result, homebuyers are expanding their search more affordable areas where they can break into homeownership, stop paying rent, and start building home equity.

The National Association of Home Builders (NAHB) and Wells Fargo track home affordability through the Housing Opportunity Index (HOI). This index measures the percentage of homes that are affordable to families earning the area median income.

It should be no surprise that HOI is at an all-time low in its nearly 10-year existence. Nationwide, just 56.6% of homes are affordable at the U.S. median income of $79,000.

Even with affordability down nationwide, some metros were hit harder than others, and more than 50 metros have an HOI over 80%.

Below are the 10 most affordable and least affordable metros in which to buy a home.

10 most affordable metros for homebuying

Metro area HOI (% of homes affordable at median income) Median family income (000s) Median sales price (000s) National HOI rank
Davenport-Moline-Rock Island, IA-IL93.476.31281
Monroe, MI93.078.61882
Sierra Vista-Douglas, AZ92.966.91963
Fairbanks, AK92.492.52974
Wheeling, WV-OH9263.61205
Cumberland, MD-WV90.960.81356
California-Lexington Park, MD90.3116.53497
Kokomo, IN90.369.81497
Odessa, TX89.684.32409
Lansing-East Lansing, MI89.179.115510
Based on Q3 2021 data from NAHB.

10 least affordable metros for homebuying

Metro area HOI (% of homes affordable at median income) Median family income (000s) Median sales price (000s) National HOI rank
Corvallis, OR6.093.0455238
Los Angeles-Long Beach-Glendale, CA*8.380.0801237
Salinas, CA9.980.9758236
Anaheim-Santa Ana-Irvine, CA*13.3106.7902234
San Francisco-Redwood City-South San Francisco, CA*13.3145.41500234
San Diego-Carlsbad, CA15.995.1732233
Napa, CA16.3101.5750232
Santa Cruz-Watsonville, CA18.6111.91000231
San Luis Obispo-Paso Robles-Arroyo Grande, CA19.097.8723230
Santa Maria-Santa Barbara, CA20.090.1750229
*Indicates Metropolitan Divisions. All others are Metropolitan Statistical Areas. Based on Q3 2021 data from NAHB.

5 takeaways from the nations extreme housing markets

1. Corvallis, Oregon redefined rock bottom

With just 6% of homes affordable at the area median income, Corvallis was the least affordable housing market in the third quarter of 2021. For reference, the least affordable market in the first quarter of 2021 (Los Angeles-Long Beach-Glendale, Cali.) had an HOI of 11.6%.

In Q1 2021, when we last checked, Corvallis had a 15.9% HOI and a median sales price of $390,000. But over the last two quarters the median sales price grew $65,000 and the median income didn’t budge, cutting the HOI nearly 10 percentage points.

2. California-Lexington Park, Maryland is still the best kept secret in housing

In Q1 2021, more than 95% of homes were affordable at the area median income in California-Lexington Park, which is impressive by itself. Two quarters later, the median sales price is up nearly $50,000 and the median income is unchanged, but this metro still has an HOI above 90%.

For comparison, the median income in Seattle-Bellevue-Everett, Wash. is less than that of California-Lexington Park, but the median home sales price is more than double.

Metro area HOI (% of homes affordable at median income) Median family income (000s) Median sales price (000s) National HOI rank
California-Lexington Park, Md.90.3116.53497
Seattle-Bellevue-Everett, Wash.31.5 115.7 725212
Based on Q3 2021 data from NAHB.

3. Small metros dominate affordability

Nine of the top 10 most affordable metros are small metros with under 500,000 people per the 2020 census. Sliding in at number 10, Lansing-East Lansing, Mich. is the only top 10 affordable metro with more than 500,000 people.

Setting aside metro areas with less than half a million people, the most affordable list looks like this:

  1. Lansing-East Lansing, Mich. (HOI: 89.6%)
  2. Pittsburgh, Penn. (88.4%)
  3. Indianapolis-Carmel-Anderson, Ind. (88%)
  4. Scranton-Wilkes-Barre-Hazleton, Penn. (87.3%)
  5. Harrisburg-Carlisle, Penn. (86.6%)
  6. Youngstown-Warren-Boardman, Ohio-Penn. (85.8%)
  7. Columbia, S.C. (85.6%)
  8. Akron, Ohio (84.8%)
  9. Toledo, Ohio (83.7%)
  10. Rochester, N.Y. (83.3%)

4. California’s affordability issues linger

If it weren’t for Corvallis, California metros would have had a clean sweep of the top ten, and then some. In fact, California’s most affordable metro area — Chico — still has an HOI below 50% and is ranked 174 out of 238 metros.

The lack of affordable housing has been a key driver of inland migration out of California to metros like Boise, Phoenix, Austin, and Salt Lake City. It also prompted a wave of legislative action, most notably the bill that ends single-family zoning in many areas. It is worth watching to see if new zoning laws alleviate California’s housing crisis in 2022.

5. Low mortgage rates are salvaging affordability

At 56.6%, the national HOI is at it’s lowest point since the beginning of the index in 2012. However, it’s not far below the previous low of 56.9% set in the third and fourth quarters of 2019. That’s because mortgage rates below 3% have allowed homebuyers to spend more on their purchase price and less on interest.

Despite the national home price increasing by $87,000 since 2018, the HOI only slipped 0.3 percentage points thanks to low interest rates.

Here’s a look at HOI, median home price, and affordability in the third quarter of the last 5 years:

Year HOINational median home price30-year interest rate
201759.1%$260,0003.96%
201856.9%$268,0004.63%
201963.6%$280,0003.73%
202063.3%$313,0003.05%
202156.6%$355,0002.95%
Based on Q3 2021 data from NAHB.

Some references sourced within this article have not been prepared by Fairway and are distributed for educational purposes only. The information is not guaranteed to be accurate and may not entirely represent the opinions of Fairway.

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