Finance
The 25 best cities for buyers on a budget: Zillow
Pittsburgh, Jackson, Syracuse and Toledo all rank among the most affordable cities. (iStock)
The housing market has seen better days. Although housing affordability is trending upward, according to the National Association of Realtors, mortgage rates and homeowners insurance are still up across the country, adding to the cost of homeownership.
The current state of the market is leaving some buyers searching for affordable areas. Zillow recently released an analysis of 25 metro areas which showed the cost of housing is less than 30% of an average household budget.
It’s often recommended that homebuyers pay a third of their income or less towards housing costs. This is considered affordable and leaves money for other necessities and savings.
Here are the 25 areas Zillow’s study deems most affordable.
If you think you’re ready to shop around for a home loan, consider using Credible to help you easily compare interest rates from multiple lenders at once.
HOMEOWNERS’ MONTHLY MORTGAGE PAYMENTS DROPPED TO LOWEST RATE IN YEARS
1. Pittsburgh, Pennsylvania
Pennsylvania’s second-largest city is home to just over 300,000 people and has some of the lowest housing costs in the country. The average home value is $202,454, according to the Zillow study. This creates a typical mortgage payment of about $1,053.
2. Jackson, Mississippi
For warm weather and a city steeped in history, Jackson, Mississippi is the largest city in the state with housing costs averaging under $200,000. The Zillow report found the typical home value is $185,338, equaling a mortgage payment of just $964, on average.
3. Syracuse, New York
For those who want to live in New York but don’t want to pay high NYC prices, Syracuse is a major city with plenty of opportunities. Homebuyers pay $212,404, on average for their homes, which means a monthly mortgage payment of about $1,105.
4. Toledo, Ohio
Toledo sits on the tip of Lake Erie and is home to the Toledo Museum of Art, making it a good selling point for artsy buyers. Plus, the average monthly mortgage payment is just $920. The typical home price is $176,787, on average.
5. Wichita, Kansas
For a small, but affordable city, Wichita stands out. It’s the largest city in Kansas, but homebuyers pay $201,780 for the average home. This equates to $1,050 per month in a monthly mortgage payment.
6. Akron, Ohio
Another city in Ohio makes Zillow’s top ten affordable places to live. Akron is a small city with a population of just over 188,000. The average buyer pays $207,190 for a home and $1,078 in a monthly mortgage payment.
7. St. Louis, Missouri
St. Louis offers the famous Gateway Arch, a world-class zoo and the Mississippi River. While it’s not the most affordable city on this list, most homebuyers can still get a house for under $300,000. Zillow reports the average home value is $242,214, which means a monthly payment of about $1,260.
8. Augusta, Georgia
For nice weather and an up-and-coming food scene, Augusta, Georgia has more affordable housing options than Atlanta. The typical home price sits at $224,839, on average. Buyers typically pay $1,170 for their monthly mortgage payment.
9. Rochester, New York
Sitting on Lake Ontario, Rochester is one of the more affordable cities in New York. Homes average $233,753 and monthly mortgage payments average $1,216.
10. Detroit, Michigan
Detroit has been trying to make a comeback for years after its population decreased. It has a vibrant downtown scene and a lot of inventory. Buyers pay $240,536 for an average home, which equates to a mortgage payment of about $1,251.
11. Birmingham, Alabama
For those looking for constant sun, tons of parks and some good Southern food, Birmingham has all of these, paired with relatively low mortgage payments. Home values average $247,702, with mortgage payments averaging $1,289, according to Zillow.
If you’re looking to purchase a home in today’s market, you can explore your mortgage options by visiting Credible to compare rates and lenders and get a mortgage preapproval letter in minutes.
THIS IS THE #1 CITY FOR FIRST-TIME HOMEBUYERS, AND OTHER HOT US HOUSING MARKETS
12. Baton Rouge, Louisiana
The capital of Louisiana, Baton Rouge, is home to Louisiana State and a strong job market, as well as low home values, particularly compared to the much more expensive New Orleans. The average home costs $228,418, with a monthly mortgage payment of $1,188.
13. Indianapolis, Indiana
Indianapolis has a little bit of everything. Whether buyers are sports fans looking to attend Pacers games or the Indy 500 or want a variety of job opportunities, they’ll find what they’re looking for. Many homebuyers can get by without paying over $1,500 for their mortgage. The average home price is just over $270,000.
14. Little Rock, Arkansas
Little Rock is the capital city of Arkansas, set on the banks of the Arkansas River. Prospective homebuyers will pay $212,713, on average, for a typical home. This is equal to $1,107 for a monthly payment.
15. Des Moines, Iowa
Des Moines has a vibrant art and live music scene thanks to its bustling downtown and the Des Moines Art Center. Since it’s the capital of Iowa, home prices are slightly higher than some alternative cities, but the typical home value is still $270,827, with an average monthly payment of about $1,400.
16. Columbia, South Carolina
Columbia is the capital of South Carolina with a population of 139,698. It’s home to the Riverbanks Zoo and Garden, which is a botanical garden and zoo hybrid. Homebuyers should expect to pay about $243,161, on average. This means a mortgage payment of $1,265.
17. Cleveland, Ohio
Cleveland is the perfect city for sports enthusiasts, artists, entrepreneurs and anyone looking for a thriving downtown. Plus, housing is nice and affordable, with homebuyers paying about $215,913 for a home and $1,123 for a monthly mortgage payment.
18. Buffalo, New York
Buffalo, New York is a popular vacation destination thanks to its location near Niagara Falls. It also boasts an affordable housing market, with the average monthly mortgage payment being $1,274. The average home price is $244,825.
19. Grand Rapids, Michigan
Grand Rapids is the only city on Zillow’s list where home prices average slightly over $300,000. Even so, this is less than the national average of $417,700. The average homebuyer will pay $1,610 in a monthly mortgage payment and $309,531 for a home.
20. Memphis, Tennessee
Memphis has always been a cool city with a huge blues, soul and rock music scene. Big names like Elvis, Johnny Cash and B.B. King all recorded albums at the well-known Sun Studio. It’s also home to many affordable homes. The average buyer will pay $234,635 for a home, securing a mortgage of $1,221, on average.
21. Oklahoma City, Oklahoma
The capital city of Oklahoma has a lot to do, from musical festivals to country-themed bars. It also has an affordable housing market, with the average home going for $229,529. This equals an average mortgage payment of $1,194.
22. Louisville, Kentucky
Home to the Kentucky Derby, homebuyers can get a mortgage for less than $1,300 in Louisville. The average price for a home sits at $247,856.
23. Harrisburg, Pennsylvania
Harrisburg offers a small city vibe with just over 50,000 people. Even with a small housing market, the city boasts affordable options. Home prices average $274,217 and mortgage payments average $1,427.
24. Cincinnati, Ohio
There’s always something to do in Cincinnati. With the famous Cincinnati Zoo and multiple museums, it’s a good family city. Homebuyers pay an average of $271,766 for a home and secure a mortgage payment of $1,414, on average.
25. Tulsa, Oklahoma
Tulsa is an affordable city overall. Mortgage payments typically come in under $1,200 per month and the average homebuyer will pay $227,703, on average, for a new home.
You can explore your mortgage options in minutes by visiting Credible to compare rates and lenders.
HOMEBUYERS CONSIDERING PURCHASING TINY HOMES AND FIXER-UPPERS TO COMBAT HIGH HOME PRICES
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U.S. Federal Reserve Chair Jerome Powell testifies before a Senate Banking, Housing and Urban Affairs Committee hearing on “The Semiannual Monetary Policy Report to the Congress,” at Capitol Hill in Washington, U.S., Feb. 11, 2025.
Craig Hudson | Reuters
The popular narrative among Federal Reserve policymakers these days is that policy is “well-positioned” to adjust to any upside or downside risks ahead. However, it might be more accurate to say that policy is stuck in position.
With an abundance of unknowns swirling through the economy and the halls of Washington, the only gear the central bank really can be in these days is neutral as it begins what could be a long wait for certainty on what’s actually ahead.
“In recent weeks, we’ve heard not only enthusiasm — particularly from banks, about possible shifts in tax and regulatory policies — but also widespread apprehension about future trade and immigration policy,” Atlanta Fed President Raphael Bostic said in a blog post. “These crosscurrents inject still more complexity into policymaking.”
Bostic’s comments came during an active week for what is known on Wall Street as “Fedspeak,” or the chatter that happens between policy meetings from Chair Jerome Powell, central bank governors and regional presidents.
Officials who have spoken frequently described policy as “well-positioned” — the language is now a staple of post-meeting statements. But increasingly, they are expressing caution about the volatility coming from President Donald Trump’s aggressive trade and economic agenda, as well as other factors that could influence policy.
“Uncertainty” is an increasingly common theme. In fact, Bostic titled his Thursday blog post “Uncertainty Calls for Caution, Humility in Policymaking.” A day earlier, the rate-setting Federal Open Market Committee released minutes from the Jan. 28-29 meeting, with a dozen references to the uncertain climate in the document.
The minutes specifically cited “elevated uncertainty regarding the scope, timing, and potential economic effects of possible changes to trade, immigration, fiscal, and regulatory policies.”
Uncertainty factors into the Fed’s decision making in two ways: the impact that it has on the employment picture, which has been relatively stable, and inflation, which has been easing but could rise again as consumers and business leaders get spooked about the impact tariffs could have on prices.
Missing the target
The Fed targets inflation at 2%, a goal that has remained elusive for going on four years.
“Right now, I see the risks of inflation staying above target as skewed to the upside,” St. Louis Fed President Alberto Musalem told reporters Thursday. “My baseline scenario is one where inflation continues to converge towards 2%, providing monetary policy remains modestly restrictive, and that will take time. I think there is a potential for inflation to remain high and activity to slow. … That’s an alternative scenario, not a baseline scenario, but I’m attentive to it.”
The operative in Musalem’s comment is that policy holds at “modestly restrictive,” which is where he considers the current level of the fed funds rate between 4.25%-4.5%. Bostic was a little less explicit on feeling the need to keep rates on hold, but emphasized that “this is no time for complacency” and noted that “additional threats to price stability may emerge.”
Chicago Federal Reserve President Austan Goolsbee, thought to be among the least hawkish FOMC members when it comes to inflation, was more measured in his assessment of tariffs and did not offer commentary in separate appearances, including one on CNBC, on where he thinks rates should go.
“If you’re just thinking about tariffs, it depends how many countries are they going to apply to, and how big are they going to be, and the more it looks like a Covid-sized shock, the more nervous you should be,” Goolsbee said.
Many risks ahead
More broadly, though, the January minutes indicated a Fed highly attuned to potential shocks and not interested in testing the waters with any further interest rate moves. The meeting summary pointedly noted that committee members want “further progress on inflation before making additional adjustments to the target range for the federal funds rate.”
There’s also more than just tariffs and inflation to worry about.
The minutes characterized the risks to financial stability as “notable,” specifically in the area of leverage and the level of long-duration debt that banks are holding.
Prominent economist Mark Zandi — not normally an alarmist — said in a panel discussion presented by the Peter G. Peterson Foundation that he worries about dangers to the $46.2 trillion U.S. bond market.
“In my view, the biggest risk is that we see a major sell off in the bond market,” said Zandi, the chief economist at Moody’s Analytics. “The bond market feels incredibly fragile to me. The plumbing is broken. The primary dealers aren’t keeping up with the amount of debt outstanding.”
“There’s just so many things coming together that I think there’s a very significant threat that at some point over the next 12 months, we see a major sell-off in the bond market,” he added.
In this climate, he said, there’s scant chance for the Fed to cut rates — though markets are pricing in the potential for a half percentage point in reductions by the end of the year.
That’s wishful thinking considering tariffs and other intangibles hanging over the Fed’s head, Zandi said.
“I just don’t see the Fed cutting interest rates here until you get a better feel about inflation coming back to target,” he said. “The economy came into 2025 in a pretty good spot. Feels like it’s performing well. Should be able to weather a lot of storms. But it feels like there’s a lot of storms coming.”
Walmart stock may be a steal.
Former Walmart U.S. CEO Bill Simon contends the retailer’s stock sell-off tied to a slowing profit growth forecast and tariff fears is creating a major opportunity for investors.
“I absolutely thought their guidance was pretty strong given the fact that… nobody knows what’s going to happen with tariffs,” he told CNBC’s “Fast Money” on Thursday, the day Walmart reported fiscal fourth-quarter results.
But even if U.S. tariffs against Canada and Mexico move forward, Simon predicts “nothing” should happen to Walmart.
“Ultimately, the consumer decides whether there’s a tariff or not,” said Simon. “There’s a tariff on avocados from Mexico. Do you have guacamole with your chips or do you have salsa and queso where there is no tariff?”
Plus, Simon, who’s now on the Darden Restaurants board and is the chairman at Hanesbrands, sees Walmart as a nimble retailer.
“The big guys, Walmart, Costco, Target, Amazon… have the supply and the sourcing capability to mitigate tariffs by redirecting the product – bringing it in from different places [and] developing their own private labels,” said Simon. “Those guys will figure out tariffs.”
Walmart shares just saw their worst weekly performance since May 2022 — tumbling almost 9%. The stock price fell more than 6% on its earnings day alone. It was the stock’s worst daily performance since November 2023.
Simon thinks the sell-off is bizarre.
“I thought if you hit your numbers and did well and beat your earnings, things would usually go well for you in the market. But little do we know. You got to have some magic dust,” he said. “I don’t know how you could have done much better for the quarter.”
It’s a departure from his stance last May on “Fast Money” when he warned affluent consumers were creating a “bubble” at Walmart. It came with Walmart shares hitting record highs. He noted historical trends pointed to an eventual shift back to service from convenience and price.
But now Simon thinks the economic and geopolitical backdrop is so unprecedented, higher-income consumers may shop at Walmart permanently.
“If you liked that story yesterday before the earnings release, you should love it today because it’s… cheaper,” said Simon.
Walmart stock is now down 10% from its all-time high hit on Feb. 14. However, it’s still up about 64% over the past 52 weeks.
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