Home prices are in record territory, but affordability varies greatly from market to market
For many people, buying a home is out of reach today. Home costs have reached record highs, priced buyers, leaving more homes on the market than they have in the past few years.
The data confirms this. Nationwide, only 35% of homes are affordable to the average homebuyer, down from 60% in 2022. Affordable prices have been declining since the pandemic as home prices and mortgage rates rose tandemly. Both remained rising due to chronic shortages and widespread economic uncertainty.
However, trends vary widely from market to market. In some cities, homes are on sale within a week. In others, they usually sit for more than two months. Anyway, homeownership is becoming more and more out of reach, making more Americans looking to rent, including six-figure makers in cities like San Francisco and Orlando.
So where can buyers and sellers find the best deal? Redfin ranked among the 10 cheapest housing markets in the US based on median home prices and local income.
The most affordable city to buy a home in 2025
>>Read: Most Affordable Cities in the US
The most expensive city to buy a home in 2025
>>Read: The most expensive city in the US
Rust Belt cities have the most affordable homes
If you are looking for an affordable home, start your search with the rust belt. Top list of cheapest places to buy a home in the US in cities like Detroit, St. Louis, and Pittsburgh
About two-thirds of these metro homes are affordable for households earning median income. This is in stark contrast to cities like San Francisco, where affordable home shares are in single digits. Rusty belt home prices are around 50% lower than the national median, as population losses and decades of investment remain low.
But that’s starting to change. Affordable prices and updated investments have pulled buyers back, overcharged the local housing market, and boosted prices across the region. For example, in Rochester, home prices have risen by $27,000 over the past year. This is nine times the national increase.
Today, seven of the 10 cheapest housing markets in the country are found in rusty belts, but that affordable edge could shrink unless local revenues rise to suit prices.
Meanwhile, the pandemic boom town, which saw prices rise between 2020 and 2022, is currently seeing its sharpest decline.
California owns the country’s most expensive housing market
If you are buying a home in California, expect to pay your premiums. The state has six most expensive US markets, including San Francisco, San Jose and Anaheim, with prices exceeding $1 million. Los Angeles is the country’s most affordable city, with only 1% of the home being affordable to locals.
A typical California home across the state sells between $860,000 and $100,000 more than second-place Hawaiian. Even with the highest average wage in the nation, Golden State residents struggle to buy a home.
Still, some markets show signs of demand. San Francisco and San Jose – The country’s most expensive metros were seen in the most homebuyers competition earlier this year. But overall, high prices and limited affordability could keep many consumers on the sidelines.
Not all expensive markets are talking the same thing. Cities like Boise and Tacoma are also ranked among the most affordable cities, not because of high home prices. Instead, they are out of hand because local incomes are relatively low. True affordability comes when housing costs match what people earn.
When will housing affordability improve?
The higher the home prices, the more people are coming from the housing market, but bailouts are coming. With so few active buyers, sellers are currently sitting in unsold homes worth nearly $700 billion. Many of them take more than a month to sell. This growing supply and demand imbalance is expected to reduce prices by 1% by the end of the year.
Still, affordability could be even more immersed in the next few years, especially in the metro, which has the biggest gap between prices and wages. Recent research has shown that Montana and California are expected to have a wider affordable price gap by 2030.
If you are a buyer or seller looking to navigate today’s market, there are four things to keep in mind:
As prices are rising, buyers are cautious Markets vary widely
Buyers need to spend time negotiating, and sellers need to strategically set prices and be open to concessions. Whether it’s the buyer’s or seller’s market, you’ll connect with great agents who can educate you about your local market. Even if you live in an affordable and expensive city, you still can buy and sell with confidence.
Methodology
The ranking is based on the affordability of housing among the 91 largest US metropolitan areas (“cities”). Data is from Redfin to May 2025.
We ranked cities by shares of our affordable household list for local central incomers. The home was considered “affordable” if the corresponding monthly payment was below 30% of the median monthly income, assuming a 20% down payment, a typical tax and fee, and a 30-year mortgage.
