The price of real estate has gone up in almost every part of the country in the last two years. In most recent months, median home prices nationwide have hit records. While high mortgage rates may bring this down, the cost to buy a home or rent an apartment has become unaffordable in some places when measured against people’s incomes.
Much of the increase in home prices has been driven by low mortgage rates that have made more expensive homes within people’s financial reach. Another is the huge migration from large coastal cities like New York and San Franciso to smaller inland cities. The prices in these smaller places have gone up above 20% year over the previous year.
According to the Economic Policy Institute, a nonprofit think tank, a single adult can expect to pay an estimated $11,026 on housing in 2022. This amount varies across the country, however, and in many major metropolitan areas, housing costs are well below the national average.
Using data from the EPI’s Family Budget Calculator, 24/7 Wall St. identified the metro area with the lowest housing costs. Metro areas are ranked on 2022 estimates of housing and utility costs for a modest studio apartment.
Among the metro areas we considered housing costs for a single adult range from about $5,400 to $6,600. The largest share of metro areas we looked at is in the Midwest, including six in Ohio alone. Lower housing costs in these places are often a reflection of what residents can afford. Nearly every metro area we looked at has a lower median household income than the national median of $64,994.
Home values also tend to be lower in areas with low housing costs, making homeownership more affordable for larger shares of the population.
The metro where people pay the lowest housing costs is Jefferson City, MO. Here are the details:
> Est. annual housing costs: $5,364
> Median household income: $60,586 — 162nd highest of 376 metros
> Homeownership rate: 71.7% — 55th highest of 376 metros
> Median home value: $162,100 — 145th lowest of 376 metros
Methodology: To determine the metro area where single people pay the least for housing, 24/7 Wall St. reviewed data on housing costs from the Economic Policy Institute’s 2022 Family Budget Calculator.
In the Family Budget Calculator, the EPI estimates the housing costs for families to maintain a modest yet adequate standard of living. The budgets are created for 10 family types for U.S. counties and metro areas. We used estimates for a single person with no children. For this family type, the EPI assumes the single person is employed and files federal income taxes as the head of the household.
We used the 384 metropolitan statistical areas as delineated by the United States Office of Management and Budget and used by the Census Bureau as our definition of metros.
Metros were ranked based on the EPI’s annual housing cost estimates. Ties were broken using five-year estimates of median gross rent from the U.S. Census Bureau’s 2020 American Community Survey.
Additional information on median household income, homeownership rate, and median home value are from the U.S. Census Bureau’s 2020 American Community Survey. Because the Census Bureau did not release one-year estimates for 2020 due to data collection issues caused by the COVID-19 pandemic, all ACS data are five-year estimates.
Click here to read Cities Where People Pay the Lowest Housing Costs
Sponsored: Find a Qualified Financial Advisor:
Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.
Source: Read Full Article