Pittsburgh and St. Louis Among Most Affordable Housing Markets for Buyers

Highlights from this report:

  • Pittsburgh; St. Louis; and Columbus, Ohio are among the nation’s most affordable large housing markets.
  • These metro areas had the highest share of “completely affordable neighborhoods” in 2019.
  • This is based on research conducted by Trulia in April of 2019.
  • San Francisco, San Jose and Los Angles had the most unaffordable neighborhoods for median-income buyers.

Pittsburgh, Columbus, St. Louis: Most Affordable Housing Markets

Last month, the real estate research team at Trulia published a report showing which metro areas had the highest percentage of affordable neighborhoods. Pittsburgh, St. Louis and Columbus (Ohio) topped the list, having the highest percentage of “completely affordable” homes.

To determine these rankings, the company’s analysts took the current value of all homes in the nation’s 50 largest metro areas (as of April 2019). They then calculated the percentage of homes in each ZIP code that would be affordable for a local buyer earning a median income for the area.

In this case, Trulia used a 30% threshold to determine affordability. Homes were deemed to be affordable if “30% or less of the metro’s median monthly income was required to afford a mortgage payment and other expenses, including property taxes, on that home.”

Some of their key findings:

  • The three metro areas with the highest percentage of ZIP codes in which 100% of homes were affordable were: Pittsburgh, Pennsylvania (22.4%); Columbus, Ohio (19.1%); and St. Louis, Missouri (18.2%).
  • In seven metro areas, there was not a single ZIP code where 100% of the homes could be considered affordable to a typical buyer. These included the relatively pricy real estate markets of San Francisco, San Jose, Los Angeles, San Diego, Portland, Ore., Miami and Tampa.

A Closer Look at These Cities

Home prices aren’t everything. Here’s a closer look at what is happening in some of the housing markets mentioned in this report.

Pittsburgh, Pennsylvania

Among the 50 largest metro areas included in this study, Pittsburgh was deemed the most affordable housing market. It had the highest percentage or share of ZIP codes with affordable homes, based on median incomes.

Given these findings, it probably comes as no surprise that Pittsburgh also has one of the lowest median home prices among the nation’s largest metro areas.

As of May 2019, the median house value within the Pittsburgh real estate market was around $147,000. That was well below the nation’s median home price of $226,800 during that same month.

According to Trulia, nearly a quarter of the ZIP codes in that area were determined to be “completely affordable” for local home buyers with a median income, as of April 2019.

Recent forecasts for the Pittsburgh housing market suggest that prices may be leveling off, as of early summer 2019. For example, a forecast issued by Zillow in June said that home values in this area “have gone up 4.1% over the past year and Zillow predicts they will rise 0.0% within the next year.”

Population trends might have something to do with this outlook. Pittsburgh is one of the few metro areas in the U.S. that has actually shrunk over the past few years, population-wise. Within the city itself, the population declined by -1.4% from 2010 to 2018 (source: U.S. Census Bureau). The population of the nation as a whole grew by 6% during that same period.

There aren’t many home buyers moving into the area from elsewhere in the state, or from across the country. And this could be one of the reasons why some analysts are forecasting smaller (or no) price gains for the Pittsburgh housing market, compared to previous years.

Columbus, Ohio

The housing market in Columbus, Ohio also had a higher percentage of affordable neighborhoods, based on this study. With a median home price of $192,000 in May 2019, Columbus offers relatively affordable housing options for local home buyers.

And given the median income for this area (around $64,000 as of May 2019), a typical buyer in or around the city could afford to purchase a median-priced home without blowing their budgets.

But prices in the Columbus real estate market are expected to continue rising through 2019 and into 2020, according to the research team at Zillow. So home buyers who are planing a purchase might want to consider doing it sooner rather than later.

St. Louis, Missouri

The real estate market in St. Louis offers many affordable homes and neighborhoods for local buyers with an average income. Among the nation’s 50 largest metro areas, St. Louis ranked third in Trulia’s list of housing markets with the most affordable ZIP codes.

The median home price in this metro area was around $166,000 in June 2019, following a year of modest growth.

But house values might be leveling off within the St. Louis housing market. A separate report, published by Zillow in May, stated that home prices in the area might have already peaked in 2019.

Of course, there’s a big difference between a market where home prices are leveling off, and one that’s cooling down. The real estate scene in St. Louis is still fairly competitive due to a relative shortage of inventory.

Other End of the Spectrum: San Francisco, San Jose, Los Angeles

At the other end of the pricing spectrum, several California housing markets topped the list. And that should come as no surprise. Along with New York City, California’s major metro areas have long ranked among the most expensive in the nation for home buyers.

Of the 50 metro-area housing markets analyzed in this study, San Francisco, San Jose and Los Angeles had the “highest share of ZIP codes in which no homes (0%) are reasonably affordable to workaday home buyers.”

San Francisco, in particular, it a tough housing market for buyers in 2019. Those who earn a median income for that area can scarcely afford to buy a home. In this study, San Francisco had the largest share of unaffordable neighborhoods. Nearly 24% of the ZIP codes in the area “contain no affordable homes for the buyers making the region’s median income,” the report stated.

Related: Cities where teachers can’t afford homes

The good news is that affordable real estate markets outnumber unaffordable ones, and by a pretty wide margin.

According to Trulia’s research, the ZIP codes where all homes were affordable outnumbered those that were largely unaffordable by more than two to one. This means that home buyers who are priced out of a more expensive area (and are willing to relocate) can often find more affordable housing elsewhere.