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CNBC
3 days ago
- Business
- CNBC
The best places in America to buy a house on a $125,000 salary
If you want as many options as possible when house hunting, don't sleep on Ohio. The Buckeye State is home to the five areas with the most affordable homes for Americans making $125,000, according to the 2025 Housing Affordability and Supply Report from the National Association of Realtors and The South was well represented in the top 10, too, including cities in Arkansas, Florida, South Carolina and Texas. The U.S. housing market "is at a turning point," says NAR Senior Economist Nadia Evangelou. After a years-long shortage, inventory has started to rebound: The number of listings shot up nearly 20% between March 2024 and March 2025. But an affordability gap persists. "For many first-time homebuyers, navigating the current housing market still feels like window shopping," Evangelou said in a release. "Listing prices don't match [their] budgets." According to the report, middle- and upper-middle-income homebuyers (households earning between $75,000 and $100,000 a year) have seen the largest uptick in affordable housing supply. Meanwhile, households earning $75,000 are only able to afford about a fifth of home listings nationwide. Offers in this section are from affiliate partners and selected based on a combination of engagement, product relevance, compensation, and consistent availability.10–30 years62010-, 15- and 30-year fixed-term conventional loans, 30-year VA and FHA loans, custom mortgages with fixed-rate terms from 8 to 29 years.620 To determine the share of listings that are financially accessible on a $125,000 salary, NAR used listings from March 2025 in the 100 largest metropolitan statistical areas (MSA).The calculations are based on a 30-year fixed-rate mortgage with a down payment of 20% or less, assuming that no more than 30% of a family's earnings are allocated toward housing, as recommended by the U.S. Department of Housing and Urban Development (HUD). Maximum home price: $410,340Share of affordable listings: 89% The MSA encompassing Youngstown and Boardman, Ohio, and Warren, Pennsylvania, is popular with commuters who work in nearby Cleveland or Pittsburgh. In 2024, NAR identified Youngstown as one of the last metro areas where a household of nearly any income level could find an affordable single-family home. Maximum home price: $402,940Share of affordable listings: 83% The fourth-largest MSA in Ohio, the greater Dayton area includes Kettering and the surrounding Miami Valley. A loss of manufacturing jobs and the 2008 housing market crash fueled a steep population decline, but the region has begun to recover: In 2022, the population was over 812,000, up from 799,700 in 2010. Maximum home price: $413,210Share of affordable listings: 82.7% Akron was the heart of the U.S tire and rubber industries throughout the 20th century, and both Bridgestone and Goodyear still have a major presence. The median household income in the Akron MSA was $48,544 in 2023, a 4.18% increase from 2022. Maximum home price: $408,270Share of affordable listings: 81.5% The Toledo MSA, which includes Ohio's Fulton, Lucas, and Wood Counties, has long been a bedroom community for Detroit. It's also home to Fortune 500 company Owens Corning, the world's largest manufacturer of fiberglass composites. Maximum home price: $414,350Share of affordable listings: 79.3% The Cleveland-Elyria, Ohio, MSA incorporates Ashtabula, Cuyahoga, Geauga, Lake, Lorain, and Medin Counties. In 2022, it had a population of 2.06 million, making it the third-largest metropolitan area in the state and the 33rd-largest in the nation. Maximum home price: $381,960Share of affordable listings: 79.1% Northeastern Pennsylvania's coal industry helped fuel the American industrial revolution. In 2024, the Scranton-Wilkes-Barre MSA remained the state's fifth-largest metropolitan area, with a population of 574,000. Maximum home price: $423,590Share of affordable listings: 78.2% The state capital, Little Rock is a political, economic and cultural hub in the American South. The Little Rock-North Little Rock-Conway MSA has seen a population surge over the last half-century, from 396,462 in 1970 to nearly 777,000 in 2024, Maximum home price: $427,430Share of affordable listings: 78.1% About 30 minutes east of Tampa, the Lakeland-Winter Haven MSA had a population of 852,878 in 2024, a major increase from 485,378 in 2000. Florida Southern College in Lakeland is home to the largest gathering of Frank Lloyd Wright architecture in the world. Maximum home price: $362,540Share of affordable listings: 78.0% The population of the El Paso MSA ballooned from 680,942 in 2000 to 879,392 in 2024. Located on the Mexico-U.S. border, El Paso is the epicenter of the Borderplex Region, considered the largest bilingual workforce in the Western Hemisphere. Maximum home price: $436,330Share of affordable listings: 77.8% The Columbia MSA is another region enjoying a growth spurt in the last quarter-century, with a population that jumped from 649,181 in 2000 to 870,193 in 2024. In addition to serving as the state capital, Columbia is home to Fort Jackson, where roughly half of all soldiers in the U.S. Army receive basic combat training. According to HUD, no more than 30% of your gross income should go toward housing expenses. That includes mortgage principal and interest, as well as: With that in mind, someone earning $125,000 a year should keep their total housing budget to $3,125 a month or less. How much you can spend depends on the size of your down payment, and the cost of expenses like homeowners insurance, property taxes and private mortgage insurance in your location. When NAR accounted for these variables, it found that the maximum price that families earning $125,000 could afford ranged from $356,940 to $542,440. See how much home you can afford using our mortgage calculator. In part, the current scarcity is being fueled by Covid-era supply-chain issues, material costs and labor shortages. But new home builds dropped sharply after the 2008 subprime mortgage crisis. And historically high mortgage rates have deterred many homeowners from selling, just as millennials entered their peak homebuying years. According to the Federal Reserve, the median U.S. home price in the first quarter of 2025 was $416,900. There are wide variations depending on the state, city and neighborhood you live in, however, and that figure doesn't factor in homeowners insurance, property taxes and other housing expenses. Someone earning $125,000 a year can spend as much as $542,440 on a house, depending on their location, down payment, outside financial obligations, current mortgage rates and other factors. Ohio is considered the most affordable state for homebuyers. The median household income is 1.5 times more than what's needed to afford a median-priced home in the state. At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every mortgage article is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of financial products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.
Yahoo
21-05-2025
- Business
- Yahoo
Not quite the American dream: Renting is becoming a better deal, even if you're wealthy or a retiree
Gen Z and millennials are delaying homebuying, and more older adults are renting. High home prices and maintenance costs are making renting more appealing than buying for many. Wealthy people are also choosing the flexibility and amenities that come with renting. Gen Zers and millennials are postponing buying their first home, a growing number of older people are renting, and tenants are staying in their rentals for longer. This adds up to a record-high number of renters and an increasing share of those renters in older generations. "Renting today isn't just for young adults starting out," said Nadia Evangelou, a senior economist for the National Association of Realtors. "It's actually a much more mixed picture. Over the past decade, we have seen more older millennials and Gen Xers staying in rentals longer, and even some boomers, for example, opting to rent later in life." The overall number of renters has grown over the last several years. There were 45.6 million renter-occupied housing units in the US in 2023, up from 39.7 million in 2010, based on the Census Bureau's American Community Survey. Are you renting a home longer than you thought you would, or have you become a renter again later in life? Share your experience with these reporters at erelman@ and mhoff@ The US is also seeing an uptick in older tenants. An Urban Institute projection found that the share of people 65 and older who rent their homes will grow from 22% in 2020 to 27% in 2040 — an additional 5.5 million renting households. Older Black renters will see the biggest jump, doubling in number between 2020 and 2040. A smaller share of US renter-occupied housing units were headed by people under 35 years old in 2023 than in 2010. Meanwhile, the share of rental households headed by someone 65 or older grew over that period. This embedded content is not available in your region. Renters are staying in their homes longer as well, per a Redfin analysis of Census Bureau data. "Renting is becoming less of a short-term stop and more of a long-term reality for many households," Evangelou said. This embedded content is not available in your region. The main reason people are renting for longer: the surging cost of homeownership. Home prices have soared across the country amid a housing shortage. At the same time, property taxes, home insurance, and home repair and maintenance costs are on the rise. All of that has made renting a better deal than buying in many places — a reversal of the historic norm. Indeed, homebuyers purchasing starter homes in 50 major cities in 2024 spent over $1,000 more on housing costs each month than tenants do. To be sure, many renters are struggling, too. Tenants' incomes aren't keeping up with rising housing costs, and a rising share of renters are cost-burdened, meaning they spend more than 30% of their income on housing. Some Americans are renting for longer by choice. Rich renters are on the rise. Many millionaire millennials and boomers with healthy savings, who could afford to buy a home, are opting instead to rent. They like the flexibility of a lease, the convenience of having a landlord handle home maintenance, and the amenities luxury rentals offer, like in-building doggy day care, dry cleaning, and yoga classes. "I think of renting as paying for a service, and liken it to a hotel," start-up founder Tori Dunlap, a 30-year-old multimillionaire, told BI last year. "Renting is flexible, and I don't have to worry about things that homeowners worry about, like committing to a particular place or neighborhood or dealing with a burst pipe." Some of these affluent renters opt instead to keep their money in the market or other more flexible, higher-return investments. "People are reevaluating whether or not they want their homes to be their asset wealth-builder," Doug Ressler, an analyst at Yardi Matrix, part of the property-management software firm Yardi, said. He added that higher-income tenants "want to have the freedom and mobility of time, and they don't want to be saddled with the things that a house brings with it." Some financial advisors are also challenging the conventional wisdom that buying a home is a smarter financial decision than renting. "You've been lied to about buying property," Ramit Sethi, a popular financial advisor and star of the Netflix show "How to get rich," said in a 2023 video titled "Why I Don't Own a House as a Multi-Millionaire." Sethi recommends that those who buy a home take into account the "phantom" costs of maintenance, repairs, insurance, and buying and selling fees, and urges them to maintain diverse investments. Read the original article on Business Insider Sign in to access your portfolio
Business Insider
21-05-2025
- Business
- Business Insider
Not quite the American dream: Renting is becoming a better deal, even if you're wealthy or a retiree
Gen Z and millennials are delaying homebuying, and more older adults are renting. High home prices and maintenance costs are making renting more appealing than buying for many. Wealthy people are also choosing the flexibility and amenities that come with renting. "Renting today isn't just for young adults starting out," said Nadia Evangelou, a senior economist for the National Association of Realtors. "It's actually a much more mixed picture. Over the past decade, we have seen more older millennials and Gen Xers staying in rentals longer, and even some boomers, for example, opting to rent later in life." The overall number of renters has grown over the last several years. There were 45.6 million renter-occupied housing units in the US in 2023, up from 39.7 million in 2010, based on the Census Bureau's American Community Survey. The US is also seeing an uptick in older tenants. An Urban Institute projection found that the share of people 65 and older who rent their homes will grow from 22% in 2020 to 27% in 2040 — an additional 5.5 million renting households. Older Black renters will see the biggest jump, doubling in number between 2020 and 2040. A smaller share of US renter-occupied housing units were headed by people under 35 years old in 2023 than in 2010. Meanwhile, the share of rental households headed by someone 65 or older grew over that period. Renters are staying in their homes longer as well, per a Redfin analysis of Census Bureau data. "Renting is becoming less of a short-term stop and more of a long-term reality for many households," Evangelou said. Renting could be a smart financial move The main reason people are renting for longer: the surging cost of homeownership. Home prices have soared across the country amid a housing shortage. At the same time, property taxes, home insurance, and home repair and maintenance costs are on the rise. All of that has made renting a better deal than buying in many places — a reversal of the historic norm. Indeed, homebuyers purchasing starter homes in 50 major cities in 2024 spent over $1,000 more on housing costs each month than tenants do. To be sure, many renters are struggling, too. Tenants' incomes aren't keeping up with rising housing costs, and a rising share of renters are cost-burdened, meaning they spend more than 30% of their income on housing. Some Americans are renting for longer by choice. Rich renters are on the rise. Many millionaire millennials and boomers with healthy savings, who could afford to buy a home, are opting instead to rent. They like the flexibility of a lease, the convenience of having a landlord handle home maintenance, and the amenities luxury rentals offer, like in-building doggy day care, dry cleaning, and yoga classes. "I think of renting as paying for a service, and liken it to a hotel," start-up founder Tori Dunlap, a 30-year-old multimillionaire, told BI last year. "Renting is flexible, and I don't have to worry about things that homeowners worry about, like committing to a particular place or neighborhood or dealing with a burst pipe." Some of these affluent renters opt instead to keep their money in the market or other more flexible, higher-return investments. "People are reevaluating whether or not they want their homes to be their asset wealth-builder," Doug Ressler, an analyst at Yardi Matrix, part of the property-management software firm Yardi, said. He added that higher-income tenants "want to have the freedom and mobility of time, and they don't want to be saddled with the things that a house brings with it." Some financial advisors are also challenging the conventional wisdom that buying a home is a smarter financial decision than renting. "You've been lied to about buying property," Ramit Sethi, a popular financial advisor and star of the Netflix show "How to get rich," said in a 2023 video titled "Why I Don't Own a House as a Multi-Millionaire."
Business Insider
21-05-2025
- Business
- Business Insider
Not quite the American dream: Renting is becoming a better deal, even if you're wealthy or a retiree
Gen Zers and millennials are postponing buying their first home, a growing number of older people are renting, and tenants are staying in their rentals for longer. This adds up to a record-high number of renters and an increasing share of those renters in older generations. "Renting today isn't just for young adults starting out," said Nadia Evangelou, a senior economist for the National Association of Realtors. "It's actually a much more mixed picture. Over the past decade, we have seen more older millennials and Gen Xers staying in rentals longer, and even some boomers, for example, opting to rent later in life." The overall number of renters has grown over the last several years. There were 45.6 million renter-occupied housing units in the US in 2023, up from 39.7 million in 2010, based on the Census Bureau's American Community Survey. Are you renting a home longer than you thought you would, or have you become a renter again later in life? Share your experience with these reporters at erelman@ and mhoff@ The US is also seeing an uptick in older tenants. An Urban Institute projection found that the share of people 65 and older who rent their homes will grow from 22% in 2020 to 27% in 2040 — an additional 5.5 million renting households. Older Black renters will see the biggest jump, doubling in number between 2020 and 2040. A smaller share of US renter-occupied housing units were headed by people under 35 years old in 2023 than in 2010. Meanwhile, the share of rental households headed by someone 65 or older grew over that period. Renters are staying in their homes longer as well, per a Redfin analysis of Census Bureau data. "Renting is becoming less of a short-term stop and more of a long-term reality for many households," Evangelou said. Renting could be a smart financial move The main reason people are renting for longer: the surging cost of homeownership. Home prices have soared across the country amid a housing shortage. At the same time, property taxes, home insurance, and home repair and maintenance costs are on the rise. All of that has made renting a better deal than buying in many places — a reversal of the historic norm. Indeed, homebuyers purchasing starter homes in 50 major cities in 2024 spent over $1,000 more on housing costs each month than tenants do. To be sure, many renters are struggling, too. Tenants' incomes aren't keeping up with rising housing costs, and a rising share of renters are cost-burdened, meaning they spend more than 30% of their income on housing. Some Americans are renting for longer by choice. Rich renters are on the rise. Many millionaire millennials and boomers with healthy savings, who could afford to buy a home, are opting instead to rent. They like the flexibility of a lease, the convenience of having a landlord handle home maintenance, and the amenities luxury rentals offer, like in-building doggy day care, dry cleaning, and yoga classes. "I think of renting as paying for a service, and liken it to a hotel," start-up founder Tori Dunlap, a 30-year-old multimillionaire, told BI last year. "Renting is flexible, and I don't have to worry about things that homeowners worry about, like committing to a particular place or neighborhood or dealing with a burst pipe." Some of these affluent renters opt instead to keep their money in the market or other more flexible, higher-return investments. "People are reevaluating whether or not they want their homes to be their asset wealth-builder," Doug Ressler, an analyst at Yardi Matrix, part of the property-management software firm Yardi, said. He added that higher-income tenants "want to have the freedom and mobility of time, and they don't want to be saddled with the things that a house brings with it." Some financial advisors are also challenging the conventional wisdom that buying a home is a smarter financial decision than renting. "You've been lied to about buying property," Ramit Sethi, a popular financial advisor and star of the Netflix show "How to get rich," said in a 2023 video titled "Why I Don't Own a House as a Multi-Millionaire." Sethi recommends that those who buy a home take into account the "phantom" costs of maintenance, repairs, insurance, and buying and selling fees, and urges them to maintain diverse investments.
Daily Mail
20-05-2025
- Business
- Daily Mail
Report: Middle-class home buyers priced out of housing market
The classic American Dream of owning a home is now officially out of reach for much of the middle class. A shortage of affordable properties is making homeownership nearly impossible, especially for workers in honorable fields like teaching and nursing, a new report has revealed. In March, only one in five homes listed across the US was considered affordable for households earning $75,000 a year. Before the pandemic, nearly half of all listings were considered within reach for the same income bracket, according to the National Association of Realtors (NAR). The report found the US would need to add more than 400,000 new homes priced at $255,000 or less to return to pre-Covid levels of affordability. A single family home in the US now sells for nearly $420,000, according to the Federal Reserve . Stubborn mortgage rates are also causing would-be buyers to stay away. 'It's discouraging,' said Nadia Evangelou, senior economist for the NAR, told CBS News . 'We hear from people who are earning a good income — nurses, teachers, plumbers — and still feel like homeownership is out of reach.' But that could soon change, as experts predict various markets across the US could be heading for a crash , sending home prices plummeting. Middle-income earners were once the backbone of America's housing market, when working hard at an everyday job would allow for home ownership. But now 26 major metros are seeing worsening affordability gaps. Los Angeles, San Diego, Miami, and New York City are among the least affordable cities to buy. In Los Angeles, the number of homes affordable to middle-income families has dropped by over 12,000 listings in the last year. Meanwhile in Miami, the number of homes affordable to middle-income families has dropped by over 21,000. Formerly modestly-priced areas like Scranton and Harrisburg, Pennsylvania, are also now out of reach due to restrictive zoning laws and lack of new construction, the NAR said. The state ranked 44th in new housing development between 2017 and 2023. The lack of building has sent existing home prices soaring. 'Although the total number of homes for sale has improved since the low point in 2021, many new listings are simply out of reach for a large share of American households,' the report reads. 'That's why home sales in the lower and middle price tiers remain sluggish and more volatile than the high-end market — high prices, elevated mortgage rates, and a lack of affordable options still squeeze buyers at these levels,' the report continued. Overall, as of March, a household earning $50,000 can only afford 8.7 percent of listings today, down from 9.4 percent a year ago. Households earning $75,000 a year — often made up of teachers, nurses, and skilled trades workers — can afford 21.2 percent of listings. Households earning $100,000 annually can afford 37.1 percent of listings. Higher-income households have near-total access to the market. Buyers earning $200,000 or more can afford 80 percent to 100 percent of the listings. But some places across the US are seeing a rise in affordable listings, though. In Columbia, South Carolina, and Raleigh, North Carolina, affordable listings have risen by as much as 5 percent, mostly due to new construction. Areas in Texas, Florida, and Tennessee have seen inventory not only recover, but grow higher than it was before the pandemic. According to the report, there is a solution, but it will take time and effort. 'Solving the persistent housing shortage across our country requires a multifaceted approach that involves governments, developers, and communities,' it reads. 'The goal is to create a balanced and sustainable housing market that meets the demand needs of people at any income level, particularly those most in need of affordable options.' Suggestions include easing local land-use and zoning regulations to foster more development, expanding vocational training programs to ensure an adequate labor supply, and actively promoting these initiatives. Housing options like micro-apartments, where residents share kitchens and bathrooms dorm-style, are also gaining attention as low-cost alternatives. Meanwhile, it may not all end terribly for potential buyers. The closer the US gets to a housing market crash, the better position people could be in to be able to afford a home. Nearly half of all sellers are having to give concessions to buyers as as the housing market slows to levels not seen since the Great Recession. From January through March, 44.4 percent of home sales included incentives like closing costs being covered, repair credits, or mortgage-rate buydowns. One agent said a seller offered to cover HOA fees. These extras come on top of any price negotiations and highlight just how tough the market has become for sellers. Chaley McVay, a Redfin Premier agent in Portland, OR, says she's seeing deal sweeteners in most offers, particularly for first-time buyers. 'Buyers used to ask for help with small repairs. Now they need help just to afford the purchase,' McVay explained. Stephanie Kastner, a Redfin agent in Seattle, said that sellers of condos and new townhomes are especially likely to offer major perks like closing cost coverage or, in one instance she saw, fancy appliances. 'Builders want to keep listing prices high, so they're more willing to offer extras instead of cutting the price,' Kastner said. Want more stories like this from the Daily Mail? Visit our profile page and hit the follow button above for more of the news you need.
