BAM’s Key Details

  • Zillow Research compiled the top ten most affordable markets in the fall of 2022, which are primarily based in the Midwest and Pennsylvania. 
  • In these markets, homeowners spend between 22% – 27% of their income on mortgage payments.
  • Redfin compiled data on migration, with a record high of homebuyers looking to move to a different metro area in Q3 2022. 

The housing market is facing pressure across the nation. As rates rise, we’ve seen significant drops in pending home sales and showings, and some markets are seeing major price reductions.

This has led buyers to question if there are any affordable markets left. 

Zillow Research and Redfin provided new market research this fall, showcasing the top 10 housing markets for affordability and net inflow. 

Top 10 Markets for Affordability

Affordability is a major concern in today’s market. More and more buyers are crossing the financial burden threshold by spending more than 30% of their income on monthly mortgage payments. 

To find the most affordable markets, Zillow Research compared the typical mortgage costs, including taxes and insurance, with the typical household income in the fall of 2022. Assuming a 20% down payment and no PMI, Zillow calculated what percentage of a homeowner’s income is spent on mortgage payments in cities across the country.

Here are the top 10 affordable markets and what percentage of income is spent on a mortgage:

  1. Scranton, PA—22%
  2. Youngstown, OH—23%
  3. Toledo, OH—24%
  4. Akron, OH—24%
  5. Jackson, MS—24%
  6. Pittsburgh, PA—25%
  7. Harrisburg, PA—26%
  8. Little Rock, AR—27%
  9. Indianapolis, IN—27%
  10. St. Louis, MO—27%

Top 10 Markets for Net Inflow

It’s no surprise that affordability plays a major role in homeowners’ decision to move to a different metro area. With mortgage rates near 7% and home prices appreciating year-over-year, buyers everywhere are rethinking their options. 

For some, that means moving to new areas. In quarter three of 2022, Redfin found that 24.2% of homebuyers nationwide looked to move to a new metro—a record high. 

Redfin-chart-migration-to-more affordable-metros

Here are the top 10 metros homebuyers are moving to, along with the net inflow, based on Redfin’s findings:

  1. Sacramento, CA—8,700 net inflow
  2. Miami, FL—8,000
  3. Las Vegas, NV—7,000
  4. San Diego, CA—6,800
  5. Tampa, FL—6,700
  6. Phoenix, AZ—5,200
  7. Cape Coral, FL—5,200
  8. North Port-Sarasota, FL—5,200
  9. Dallas, TX—4,100
  10. Portland, ME—3,300

Educate Consumers

As affordability remains a top priority, ensure you are working to educate consumers in your market on some of the following:

  • How buyers can calculate their maximum monthly budget to avoid financial burden
  • What to look for when searching for affordable homes
  • When it’s appropriate to negotiate (and what to negotiate for)
  • What sellers can expect as mortgage rates rise
  • How buyers and sellers can manage expectations throughout a transaction

Providing this type of information lets consumers know that buying or selling real estate is not out of the question—and it helps you build credibility and trust in your market.