Rejoice, fans of “The Office” — if you’re looking to buy a home, Scranton, Pa. also happens to be the most affordable housing market in America, according to a new report.
The report by Zillow
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— which analyzed 100 of the largest housing markets in the U.S., looking at the median household income in that city versus the monthly mortgage payment on a typically priced home — found that the small town in Pennsylvania got buyers the best bang for their buck. Scranton is known to TV fans as the setting for the popular comedy, “The Office,” about a paper company in Scranton.
For Zillow’s purposes, “mortgage payment” assumes that buyers are putting 20% down and taking out a 30-year fixed-rate mortgage, and paying taxes and insurance.
Scranton made the top of the list because the monthly mortgage payment only required 22% of the median household’s income. (Homeowners are considered cost-burdened if they spend more than 30% of their income on housing.)
Many of the most affordable markets are located in the Rust Belt, Midwest, or in the South (with the notable exception of Florida, parts of which are very expensive markets these days).
Youngstown, Toledo, and Akron, all in Ohio, followed next as the most affordable markets.
Here are the top 10 most affordable markets:
- Scranton, Pa.
- Youngstown, Ohio
- Toledo, Ohio
- Akron, Ohio
- Jackson, Miss.
- Pittsburgh, Pa.
- Harrisburg, Pa.
- Little Rock, Ark.
- Indianapolis, Ind.
- St. Louis, Mo.
With mortgage rates shooting past 7%, mortgage affordability has become a serious impediment for home buyers, who also are still contending with elevated home prices.
“Monthly payments on a typical U.S. home now take more than 38% of homeowners’ income (including taxes and insurance), the highest share since at least 2005,” Zillow said in the report.
On the flip side, the least affordable markets include San Francisco, where the mortgage payment on a typical home is 83% of the median household income.
That’s followed by Los Angeles, Honolulu, San Diego, and Ventura, Calif.
Got thoughts on the housing market? Write to MarketWatch reporter Aarthi Swaminathan at [email protected]
