Quick Summary

A new study shows that only six major U.S. metro areas remain affordable for median-income households, highlighting the deepening housing affordability crisis. Cities like Pittsburgh, Cleveland, and St. Louis offer the cheapest housing options, while Los Angeles, San Jose, and New York top the list of least affordable markets. Rising mortgage rates, underbuilding, and high construction costs continue to drive prices up, making homeownership challenging for many Americans. For buyers, this means staying informed, exploring affordable markets, and considering alternative strategies to achieve the dream of homeownership.

Top 6 Cheapest Cities to Buy a House in the US 2025

The American dream of homeownership is becoming increasingly elusive for many, as a new study reveals a stark reality in the housing market. Let’s break down the findings and explore what this means for potential homebuyers across the country.

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Only 6 out of 50 largest U.S. metro areas are considered affordable for median-income households.

Multiple factors, including underbuilding and high mortgage rates, drive the affordability crisis.

Experts predict mortgage rates to remain elevated for much of 2024.

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Top 6 Cheapest Cities to Buy a House 2025

The Affordability Crunch

A recent study by Clever Real Estate has uncovered a troubling trend: in 44 of the 50 biggest metro areas in the U.S., home prices are too high for the median-earning household to afford. Here’s what you need to know:

What Makes a Home “Affordable”?

A home is considered affordable if it costs no more than 28% of a household’s annual income, and this calculation assumes a 20% down payment.

The Lucky Six

Only six major cities remain affordable for median-income earners:

Pittsburgh

Cleveland
St. Louis
Memphis, Tennessee

Indianapolis
Birmingham, Alabama

Example: In Pittsburgh, the median home price is $199,573. With a 20% down payment, the monthly mortgage (including taxes and insurance) is about $1,398. This requires an annual income of $59,919 – well below the city’s median household income of $70,607.

The Least Affordable Cities

On the flip side, these cities ranked as the worst for first-time buyers:

Los Angeles
San Jose, California

San Diego
San Francisco
New York

Miami
Riverside, California

Los Angeles has the dubious honor of being the least affordable city, requiring an income of $249,471 to comfortably afford a median-priced home—more than double the actual median income of $87,743.

What’s Causing the Crisis?

Several factors contribute to the housing affordability problem:

Years of underbuilding leading to a housing shortage
A rapid rise in mortgage rates

Expensive construction materials
“Golden handcuff” effect: homeowners reluctant to sell due to low locked-in mortgage rates

Economists predict that mortgage rates will remain high for the first half of 2024, with potential decreases only after the Federal Reserve starts cutting rates. Even then, rates are unlikely to return to pandemic-era lows.

As of the latest report, the average rate on a 30-year loan has climbed to 7.17%, significantly higher than the 3% rates seen during the pandemic.

What This Means for You

If you’re in one of the six affordable cities, you may have better chances of homeownership.
In other areas, be prepared for significant financial challenges when buying a home.

Consider alternative housing options or locations if homeownership is a priority.
Stay informed about mortgage rate trends and housing market conditions in your area.

In conclusion, the housing affordability crisis continues to reshape the American dream of homeownership.

As the market evolves, potential buyers must stay informed and adaptable to these challenging conditions.

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Frequently Asked Question(FAQs)

What are the cheapest cities to buy a house in 2024?

According to recent studies, the six most affordable U.S. cities for homebuyers in 2024 are Pittsburgh, Cleveland, St. Louis, Memphis, Indianapolis, and Birmingham.

Why are only a few U.S. cities affordable for homebuyers?

Affordability is shrinking due to years of underbuilding, higher construction costs, and rising mortgage rates, making housing out of reach in most metro areas.

How do mortgage rates affect home affordability?

Higher mortgage rates increase monthly payments, reducing the number of households that can qualify for a loan and limiting affordability across many cities.

Which cities are the least affordable to buy a house in 2024?

Los Angeles, San Jose, San Diego, San Francisco, New York, Miami, and Riverside are among the least affordable cities, requiring much higher incomes to purchase homes.

What should homebuyers consider in today’s housing market?

Buyers should research affordable cities, monitor mortgage rate trends, and explore alternative housing options to achieve homeownership despite market challenges.

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