If you are looking to buy a home, affordability must be at the top of your mind. But how do you even begin to identify affordable markets? Jed Kolko, Trulia’s Chief Economist, just released a fresh report which lists the top 10 affordable housing markets for America’s middle class. Middle-class affordability has worsened in the past year, especially in expensive markets along the coast. However, thanks to undervalued home prices and historically low mortgage rates, the dream of homeownership is still achievable when compared with the longer-term past.

The Midwest and the South top the affordability chart. If the Midwest sounds like your perfect place to call home, head to Ohio. The Buckeye State claims five of the top ten most affordable housing markets for the middle class: Akron, Toledo, Dayton, Columbus, and Cleveland (in order of most affordable to least). Gary, Indiana comes in a respectable second with Columbia, South Carolina; Detroit, Michigan; Little Rock, Arkansas; and Rochester, New York rounding out the list.

Most Affordable Housing Markets for the Middle Class

# U.S. Metro

% of for-sale homes affordable for middle class, May 2014

Median size of affordable for-sale homes, May 2014 (square feet)

% of for-sale homes affordable for middle class, May 2013

1 Akron, OH

86%

1,350

88%

2 Toledo, OH

84%

1,350

87%

3 Dayton, OH

83%

1,350

89%

4 Gary, IN

83%

1,500

87%

5 Columbia, SC

82%

1,700

88%

6 Columbus, OH

81%

1,400

87%

7 Detroit, MI

81%

1,100

87%

8 Cleveland, OH

81%

1,350

85%

9 Little Rock, AR

81%

1,600

83%

10 Rochester, NY

81%

1,400

79%

Find out how affordable each of the 100 largest metros are for the Middle Class: Excel and PDF



Coastal areas, on the other hand, emerge as the most expensive markets for the middle class. Of the top ten cities that are the least affordable, California nabs seven of those spots. New York/New Jersey, Connecticut, and Hawaii claim the remaining three spots.

Least Affordable Housing Markets for the Middle Class

# U.S. Metro

% of for-sale homes affordable for middle class, May 2014

Median size of affordable for-sale homes, May 2014 (square feet)

% of for-sale homes affordable for middle class, May 2013

1 San Francisco, CA

14%

1050

20%

2 Los Angeles, CA

23%

1200

31%

3 Orange County, CA

24%

1100

34%

4 New York, NY-NJ

25%

1000

28%

5 San Diego, CA

28%

1100

39%

6 Ventura County, CA

29%

1250

43%

7 San Jose, CA

34%

1150

42%

8 Fairfield County, CT

37%

1350

38%

9 Honolulu, HI

39%

750

47%

10 Oakland, CA

40%

1200

52%

Find out how affordable each of the 100 largest metros are for the Middle Class: Excel and PDF



It’s important to note that affordability reflects more than price. To decide whether a home is affordable to a middle-class household or not, the report takes into account monthly payments (including insurance, mortgage, and property taxes). Read the report here to understand how affordability has been defined and calculated for each metro.

How construction affects affordability

We all know that demand influences price. The least affordable cities for the middle class added no more than 10 new units per 1000 existing units each year since 1990. On the flip side, the metropolitan areas where new construction is plentiful offer a more affordable housing stock. While demand is only one criteria that factors into the overall affordability of a market, it’s interesting to note that lower construction rates might lend to less affordable housing for the average Joe and Jane.

How education affects affordability

Since income is strongly correlated to education, those with a lower level of education may find homeownership to be out of reach — even in the nation’s most affordable areas. The Washington, D.C. metro area serves as a great example of the education/affordability gap. Only 23% of for-sale homes in Washington D.C. are affordable for those with a high school or lesser level of education. Contrastingly, however, 75% of for-sale homes are within reach for households with a bachelor’s degree. This number increases to 83% for households with a graduate degree. In the most expensive markets many homes remain out of reach of households even with college or graduate degrees. San Francisco is the perfect illustration – only 44% of homes for sale are within reach of graduate-degree households. Affordability by educational attainment for all 100 large metros can be downloaded here.

The net-net on affordability for the middle class

The most expensive markets will most likely remain unaffordable for the near future. However, most U.S. markets are within reach for the middle class. With so many factors influencing a market’s overall affordability, it’s no wonder that home prices are always on everyone’s mind. This recent report gives a solid in-depth analysis of all the factors that make markets affordable, as well as nuances that keep higher priced markets out of reach for the nation’s middle class. If you are in the market for a new home, access the report here to see if you are looking in the right places.