AdvisorSmith Discovers the Least and Most Affordable Cities for Homebuyers for 2021
The most affordable cities were located in the midwest, while the least affordable were in California
To determine which cities were the most and least affordable, AdvisorSmith used Zillow and the U.S. Census Bureau's American Community Survey data to estimate the weighted average housing price in each city. They compared the average housing price with each city's median household income to calculate each city's home affordability.
"To conduct this study, we considered the purchasing power available to households, which provides insights into homebuyers' ability to earn income that will allow them to afford their homes," said Adrian Mak, C.E.O., AdvisorSmith.
The study also calculated the price-to-income ratio, which is the average cost of a home as a multiple of the median household income in a city. The higher a city's ratio compared to the average, the less affordable the city was for homebuyers.
The cities in the study were segmented into three categories: small, midsize, and large based on population size. Small cities had a population under 100,000. Midsize cities had populations between 100,000 to 350,000, and large cities had populations over 350,000.
The top 10 cities were ranked by size and affordability to determine the most and least affordable cities of small, midsize, and large sizes.
The study found the most affordable city was Flint, MI. The city's price-to-income ratio is 1.1, and the median household income is $32,236, while the average home price is $34,067. Illinois had six cities among our top 10 affordable list for various city sizes.
The most expensive cities were all located in California, with the most costly being Palo Alto. The price-to-income ratio in Palo Alto was 16.7. The median household income was $160,360, and the average home price was $2,673,779.
To view the full list of cities and the complete study, visit https://advisorsmith.com/
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