Mortgage rates moved higher last week, likely frustrating would-be home buyers on the prowl for deals. For those who are looking for an affordable home, a new report reveals some of the cheapest cities for real estate in the U.S.
The report from personal-finance site Bankrate looked at the top 10 cheapest cities to buy a home, and ranked them in order of median list price. The price data was from Realtor.com, the company said. (Realtor.com is operated by News Corp subsidiary Move Inc., and MarketWatch is a unit of Dow Jones, which is also a subsidiary of News Corp.)
First place for the cheapest city to buy a home goes to Youngstown, Ohio, where the median list price of a home was only $149,900. The city is close to the Ohio-Pennsylvania border, about halfway between Cleveland and Pittsburgh.
“While it has a history of steel production, the city’s downtown now houses start-up tech companies,” Bankrate added. The median household income in Youngstown is $31,020, according to Bankrate.
Second on the list was Syracuse, N.Y. The median list price of homes in the city was $217,250.
The city is not only home to Syracuse University and has a college-town feel, the report says, it’s also close to nature — specifically to the Finger Lakes region.
The median household income in Syracuse is $40,076.
Third on the list was Scranton, Pa. The city is likely to evoke memories of the popular sitcom “The Office” for some, but it’s also a very affordable place to buy a home, with a median list price of $225,000.
Scranton was a “heavy coal-producing town” in the early 20th century, but it’s currently going through a major restoration and the population is growing, Bankrate said. Plus, it’s only a two-hour drive, or a three-hour bus ride to New York City.
The median household income in Scranton is $54,279.
Here are the rest of the top 10 “cheapest cities” on the list:
4. McAllen, Texas.
- Median list price: $270,000
- Median household income: $57,359
5. Little Rock, Ark.
- Median list price: $298,873
- Median household income: $53,565
6. Jackson, Miss.
- Median list price: $299,000
- Median household income: $35,070
7. Indianapolis, Ind.
- Median list price: $300,000
- Median household income: $58,479
8. Wichita, Kan.
- Median list price: $304,475
- Median household income: $56,293
9. Columbia, S.C.
- Median list price: $308,900
- Median household income: $47,524
10. Augusta, Ga.
- Median list price: $311,575
- Median household income: $43,009
Homeownership has become more unaffordable as mortgage rates have risen.
As of Friday, the 30-year fixed-rate mortgage was averaging around 6.8%, according to Mortgage News Daily. That’s a sharp rise from where rates were a few weeks ago. The rise in rates is due to the market’s expectation that the U.S. Federal Reserve will likely raise interest rates to address rising inflation.
And though home-price growth has slowed, it is still elevated. The median price of an existing home in the U.S. was $366,900 as of December, according to the National Association of Realtors.
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