The Best Cities for Housing Market Purchasing Power
Based on the current housing market conditions, on average prospective buyers across the country have less purchasing power than two years ago. In today’s market, savvy buyers in the best cities use their market purchasing power to get the most for their money.
Homebuyers are increasingly concerned about how much home they can afford to purchase as the demand for housing continues to exceed the low levels of inventory. This is in addition to the fact that home prices are reaching levels higher than the peak prices of the last housing boom. Mortgage rates are also expected to rise for the remainder of 2018.
Conversely, a strong economy means more jobs and income growth. These conditions have helped keep more money in consumers’ wallets. Cities with steady price growth and lower median home values offer buyers more purchasing power than the more expensive markets.
According to a First American analysis of home values, which factors in mortgage rates and local wages in big cities, there was an increase in purchasing power nationally of 6.4 percent. Still, in specific markets, such as Washington, D.C., home prices are steady or declining.
First American’s Real Home Price Index (RHPI) determined the 12 best cities for housing market purchasing power. The data includes area wages, home prices changes, and mortgages rates to “better reflect consumers’ purchasing power and capture the true cost of housing.”
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12. Providence, R.I.
Median sale price: $252,750
RHPI: 90.47.
Year-over-year RHPI: 6.62 percent
11. Chicago, Ill.
Median sale price: $231,424
RHPI: 68.95
Year-over-year RHPI: 6.36 percent
10. Portland, Ore.
Median sale price: $365,000
RHPI: 99.45
Year-over-year RHPI: 5.25 percent
9. Virginia Beach, Va.
Median sale price: $227,500
RHPI: 93.81
Year-over-year RHPI: 4.94 percent
8. Raleigh, N.C.
Median sale price: $259,750
RHPI: 80.03
Year-over-year RHPI: 4.88 percent
7. Philadelphia, Pa.
Median sale price: $217,594
RHPI: 84.64
Year-over-year RHPI: 4.73 percent
6. Hartford, Conn.
Median sale price: $216,100
RHPI: 72.72
Year-over-year RHPI: 3.26 percent
5. Memphis, Tenn.
Median sale price: $155,000
RHPI: 55.98
Year-over-year RHPI: 2.67 percent
4. Oklahoma City, Okla.
Median sale price: $159,500
RHPI: 72.81
Year-over-year RHPI: 2.63 percent
3. Baltimore, Md.
Median sale price: $265,000
RHPI: 82.65
Year-over-year RHPI: 2.55 percent
2. Washington, D.C.
Median sale price: $383,000
RHPI: 85.39
Year-over-year RHPI: 1.22 percent
1. Pittsburgh, Pa.
Median sale price: $148,000
RHPI: 65.23
Year-over-year RHPI: -1.24 percent
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