How to Find Affordable Housing During a Pandemic

There’s no real secret to finding a deal on a home, especially given today’s combination of record-low mortgage rates and super-tight inventories.

One possibility: Move to a cheaper area. In recent years, homeowners have moved out of pricey housing markets, particularly California and New York. The exodus of Californians has driven up prices in Idaho, Oregon and Nevada, while New Yorkers have snapped up homes in Florida. Entrepreneur Nick Huber decided to leave Boston and its high housing prices; he moved his family to Athens, Georgia. Moving cross-country isn’t an option for everyone, but it’s getting easier as more workers shift to remote work during the coronavirus pandemic.

One caveat: Comparatively cheap markets tend not to stay cheap. A Bankrate examination of home value trends found prices soaring in some markets adjacent to unaffordable areas. For instance, Oakland prices have surged as San Francisco workers look for cheaper alternatives. Similar patterns played out in Modesto, California, and Port St. Lucie, Florida.

5 most affordable metro areas

Home prices and incomes vary widely, and there are oases of affordability, mainly in the Rust Belt and Midwest. The top five most affordable among metro areas with population of 500,000 or more:

• Scranton-Wilkes Barre-Hazleton, Pennsylvania: Wages here are below national levels, but so are home prices — the median sale price was just $120,000 in the second quarter of 2020. As a result of rock-bottom prices, fully 89 percent of all new and existing homes sold in the spring quarter were affordable to families earning the area’s median income of $66,600, NAHB says. The median price jumped from $113,000 in the first quarter.
• Harrisburg-Carlisle, Pennsylvania: With a median family income of $79,000 and a median home price of $170,000, fully 87.6 percent of homes were in reach of median-income families.
• Pittsburgh: This metro area has a median family income of $77,100 and a median home price of just $155,000. As a result, 87.3 percent of homes were affordable for typical earners.
• St. Louis: The average median income of $77,000 meant the median-priced home of $165,000 fell within the budgets of 86.9 percent of buyers.
• Wilmington, Delaware: This region’s above-average median income of $84,200 made the median-priced home of $228,000 affordable to 86.8 percent of buyers.

5 least affordable areas

At the opposite end of the affordability spectrum, California dominates. The nation’s least affordable markets:

• San Francisco-Redwood City-South San Francisco: Incomes are high here — the median is $129,200. Prices are even higher — the typical home went for $1.4 million in the second quarter. That translates to just 8.5 percent of homes sold during the second quarter falling in the range of affordability for families earning the area’s median income.
• Los Angeles-Long-Beach-Glendale: In a market with a median home price of $640,000, LA’s median income of just $70,600 doesn’t go far. As a result, only 10.8 percent of homes were affordable for typical families.
• Anaheim-Santa Ana-Irvine: Orange County’s incomes are high: The typical family makes $94,600 this year. But home prices are higher, at a median of $760,000. That means just 13.4 percent of homes are in reach for average families.
• San Jose: Silicon Valley’s median family income is a healthy $131,500, but the typical home sold for $1.1 million. That meant 16.2 percent of homes sold were affordable.
• San Diego-Carlsbad: San Diego has a median family income of $86,100 and a median home price of $594,000, translating to just 20.1 percent of homes falling in the typical buyer’s budget.