Horace Greeley would probably be a little puzzled if he saw our data on buying and renting across America. That’s because if you’re looking to trade in your rental digs for a slice of that American Dream, we’re now telling you a new refrain: “Go east, young person!”
Yes, that’s right. Our data scientists crunched a lot of numbers to come up with the places where you can get the most bang for your buying buck, and where there’s a healthy supply of affordable housing. What they came up with is an eclectic mix of East, South, and Midwest markets—the Atlanta area topped the list of places where buying is almost certainly better than renting, according to our chief economist, Jonathan Smoke.
“Atlanta has always been more affordable, despite having seen very strong population growth for decades,” Smoke said. “There’s no natural barrier like an ocean or mountains or desert that limits development—so new construction has kept supply in balance with demand.
“Atlanta’s economy, which is more dependent on housing and new construction than other areas of the country, suffered more in the recent recession,” he added. “The market didn’t really start to recover substantially until last year. So it isn’t surprising to see it at the top of the list.”
Another plus for potential homeowners: Parts of Atlanta have older homes that create“fixer-upper” opportunities, and there’s also plenty of new homes, principally in outer areas.
Our data scientists used a variety of factors to calculate their findings. They looked at 2015 median incomes, median home values, and fair market rental data from the U.S. Department of Housing and Urban Development. They assumed current rates for a 30-year fixed-rate mortgage, that a buyer would have a 20% down payment, and that homeownership costs (mortgage, insurance, taxes) wouldn’t exceed 28% of the buyer’s income. Using all of those data points, the team was able to come up with a “maximum affordable price” for each market. Then it counted up the number of available homes in each market that fell under that “maximum affordable price” metric to see which markets boasted the most smart buys.
Buyer bargains
1. Atlanta-Sandy Springs-Roswell, GA
2. Chicago-Naperville-Elgin, IL-IN-WI
3. Philadelphia-Camden-Wilmington, PA-NJ-DE-MD
4. Detroit-Warren-Dearborn, MI
5. Tampa-St. Petersburg-Clearwater, FL
6. St. Louis, MO-IL
7. Pittsburgh, PA
8. Cincinnati, OH-KY-IN
9. Indianapolis-Carmel-Anderson, IN
10. Virginia Beach-Norfolk-Newport News, VA-NC
2. Chicago-Naperville-Elgin, IL-IN-WI
3. Philadelphia-Camden-Wilmington, PA-NJ-DE-MD
4. Detroit-Warren-Dearborn, MI
5. Tampa-St. Petersburg-Clearwater, FL
6. St. Louis, MO-IL
7. Pittsburgh, PA
8. Cincinnati, OH-KY-IN
9. Indianapolis-Carmel-Anderson, IN
10. Virginia Beach-Norfolk-Newport News, VA-NC
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