For many people, owning a home is the ultimate dream, whether it’s to build equity, start a family or find more room for their dog. But there’s one problem: A large swath of Americans feel that it’s an impossible task. A recent survey by OnePoll conducted for Unison found that 2 in 5 millennials think homeownership is completely out of the question.
While the labor market was booming before the pandemic, wages have remained relatively stagnant. In fact, the cumulative median hourly wage in the U.S. for workers ages 25-54, when adjusted for inflation, has only risen by 3% since 1979, according to the Brookings Institution.
But that’s not to say it’s all doom and gloom. A Wells Fargo survey published in July 2019 revealed that 95% of millennial homeowners believe the benefits of owning a home are worth any sacrifice they made to save up for it. Additionally, mortgages with lower down payments have helped make homeownership more attainable for first-time buyers in recent years. A Conventional 97 loan requires a down payment of only 3%, while the Federal Housing Administration loan minimum is 3.5% for buyers with a credit score of at least 580.
Still, the median list price for a home in the U.S. is $285,000, per Zillow. That’s a fairly hefty expense for the average American family to pay. Assuming you’re fortunate enough to cover the 20% down payment at that price and you’re locked into a 30-year fixed mortgage rate of 3.68%, you’re looking at a monthly payment of $1,303.
With stagnant wages, expensive home prices and costly mortgage payments, it’s no wonder so many Americans feel hopeless about the homebuying process. But as all homebuyers know, location is key — and there are plenty of places in the U.S. that remain both affordable and livable.
Using data from Zillow, GOBankingRates analyzed more than 100 cities in the nation’s largest housing markets to determine the best places to own a home for less than $1,000 a month. The study gathered the median list price for homes in each city and factored in the cost of a 20% down payment, property taxes and a 3.68% mortgage interest rate to find the ones where a monthly mortgage payment will run you less than $1,000. A one-year market forecast and each city’s livability score out of 100, sourced from AreaVibes, were also included in the final ranking.
If your heart is set on owning a home one day, these are the cities where your dream might be within reach, thanks to the money you can save on your monthly expenses and bills.
Last updated: Oct. 27, 2020
