The 25 Best Cities To Buy a Home for Less Than $500K
While the median sales price for new single-family homes was $400,500 in February, according to the U.S. Census Bureau, real estate news and research site ResiClub found that the average forecast from its latest roundup expects U.S. home prices to rise 2.38% in 2024.
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That means if your budget tops out at $500,000 then you’ve still got plenty of options on where to put down roots. But that sum buys far more in some places than it does in others. Purchasing the right home in the right place is about a lot more than just the average price per square foot.
Using data from Zillow, the U.S. Census Bureau, the Bureau of Labor Statistics and Sperling’s Best Places, GOBankingRates identified the 25 best cities to buy a home in that price range, including how each city’s cost of living compares to national and state averages.
With those factors and others in mind, here’s a look at the 25 best places to buy a home for less than $500,000.
25. Kansas City, Missouri
Feb 2024 Average Home Value: $231,966
Average Annual Mortgage: $16,466
Average Annual Cost of Expenditure: $23,421
The cost of living in Kansas City is about 12% lower than the national average and 3.3% higher than the Missouri average.
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24. Sacramento, California
Feb 2024 Average Home Value: $478,382
Average Annual Mortgage: $33,958
Average Annual Cost of Expenditure: $26,770
Although you can purchase a home in the capital city of California for under $500,000, the cost of living is 27% higher than the U.S. average.
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23. Tucson, Arizona
Feb 2024 Average Home Value: $334,779
Average Annual Mortgage: $23,764
Average Annual Cost of Expenditure: $22,799
Tucson’s cost of living is only 97%, which makes it about 3% lower than the national average. In the state of Arizona, the city’s cost of living is about 9% lower than the state’s average.
22. Fresno, California
Feb 2024 Average Home Value: $380,682
Average Annual Mortgage: $27,022
Average Annual Cost of Expenditure: $24,926
Fresno’s cost of living is about 4% higher than the U.S. average. However, within the state, the city’s cost of living is about 31% lower than average.
21. Albuquerque, New Mexico
Feb 2024 Average Home Value: $324,387
Average Annual Mortgage: $23,026
Average Annual Cost of Expenditure: $22,718
Albuquerque’s cost of living is 4.1% higher than New Mexico’s average COL, but it’s 8% lower than the U.S. average
20. Milwaukee
Feb 2024 Average Home Value: $192,264
Average Annual Mortgage: $13,648
Average Annual Cost of Expenditure: $24,580
If you choose to live in Milwaukee, you’ll enjoy cost of living expenses that are 12% less than the national average.
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19. Baltimore
Feb 2024 Average Home Value: $176,168
Average Annual Mortgage: $172,061
Average Annual Cost of Expenditure: $23,843
Baltimore’s cost of living is about 7% lower than the U.S. average and about 17% lower than the state of Maryland.
18. Louisville, Kentucky
Feb 2024 Average Home Value: $238,682
Average Annual Mortgage: $16,943
Average Annual Cost of Expenditure: $22,485
Louisville’s residents enjoy a cost of living that’s about 10% lower than the national average. However, the COL is also about 9% than the Kentucky average.
17. Memphis, Tennessee
Feb 2024 Average Home Value: $142,931
Average Annual Mortgage: $10,146
Average Annual Cost of Expenditure: $23,198
Memphis’ cost of living is lower than both the U.S. and state average — 14% and 5%, respectively.
16. Detroit
Feb 2024 Average Home Value: $66,891
Average Annual Mortgage: $4,748
Average Annual Cost of Expenditure: $22,795
Not only does Michigan have average home values that are way below $100,000, it also has a cost of living that’s about 8% lower than the national average.
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15. Las Vegas
Feb 2024 Average Home Value: $429,142
Average Annual Mortgage: $30,462
Average Annual Cost of Expenditure: $24,686
Although Nevada’s cost of living is about 11% higher than the U.S. average, it’s less than 1% higher as compared to the rest of the state.
14. El Paso, Texas
Feb 2024 Average Home Value: $217,672
Average Annual Mortgage: $15,451
Average Annual Cost of Expenditure: $21,944
El Paso, which is in West Texas, has a cost of living that’s 18.1% lower than the U.S. average and 13.1% higher than the average for Texas.
13. Oklahoma City
Feb 2024 Average Home Value: $201,088
Average Annual Mortgage: $14,274
Average Annual Cost of Expenditure: $23,736
The cost of living in Oklahoma City is 15% lower than the U.S. average. However, it’s 4% higher than the Oklahoma average.
12. Nashville, Tennessee
Feb 2024 Average Home Value: $443,565
Average Annual Mortgage: $31,486
Average Annual Cost of Expenditure: $24,153
The cost of living in Nashville is about 105%, which means it’s 5% higher than the national average. And when you compare the city’s COL to the state’s, it’s 17% higher.
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11. Charlotte, North Carolina
Feb 2024 Average Home Value: $399,412
Average Annual Mortgage: $28,352
Average Annual Cost of Expenditure: $24,391
If you live in Charlotte, the cost of living is only about 3% higher than the national average, but it’s about 13% higher when you compare it to North Carolina’s average.
10. Indianapolis
Feb 2024 Average Home Value: $221,744
Average Annual Mortgage: $15,740
Average Annual Cost of Expenditure: $23,343
You can save more money by living in Indianapolis than some other cities in the U.S. The capital city’s cost of living is about 14% lower than national average.
9. Columbus, Ohio
Feb 2024 Average Home Value: $252,347
Average Annual Mortgage: $17,913
Average Annual Cost of Expenditure: $23,913
Although the cost of living in Columbus is about 11% higher than the rest of the state, it’s about 9% lower than the U.S. average.
8. Fort Worth, Texas
Feb 2024 Average Home Value: $302,376
Average Annual Mortgage: $21,464
Average Annual Cost of Expenditure: $24,571
Fort Worth’s cost of living is higher than the average cost of living nationally and within the state of Texas. However, it’s only about 2% higher than the national average.
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7. Jacksonville, Florida
Feb 2024 Average Home Value: $302,792
Average Annual Mortgage: $21,494
Average Annual Cost of Expenditure: $24,292
Jacksonville’s cost of living is lower than the average for both the U.S. and the state of Florida — 4% and 7%, respectively.
6. Dallas
Feb 2024 Average Home Value: $323,003
Average Annual Mortgage: $22,928
Average Annual Cost of Expenditure: $24,447
Surprisingly, for being such an affluent city, the cost of living in Dallas isn’t too out of whack. It’s only 0.2% higher than the U.S. average and about 6% higher than the Texas average.
5. San Antonio
Feb 2024 Average Home Value: $254,946
Average Annual Mortgage: $18,097
Average Annual Cost of Expenditure: $23,295
San Antonio’s cost of living is lower than the average for both the U.S. and the state of Texas: 9% and 3%, respectively.
4. Philadelphia
Feb 2024 Average Home Value: $209,892
Average Annual Mortgage: $14,899
Average Annual Cost of Expenditure: $25,385
Although the cost of living in Philadelphia is only 4% higher than the national average, it’s 10% higher than the state’s average.
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3. Phoenix
Feb 2024 Average Home Value: $434,990
Average Annual Mortgage: $30,878
Average Annual Cost of Expenditure: $24,082
The cost of living in Phoenix is 113%, which means it’s 13% higher than the U.S. average. And when compared to the average COL in the state of Arizona, it’s about 6% higher.
2. Houston
Feb 2024 Average Home Value: $270,273
Average Annual Mortgage: $19,185
Average Annual Cost of Expenditure: $23,890
The cost of living in Houston is 3% lower compared to the national average and 3% higher compared to the state’s average.
1. Chicago
Feb 2024 Average Home Value: $291,420
Average Annual Mortgage: $20,686
Average Annual Cost of Expenditure: $25,701
The cost of living for Chicago is higher when compared to the average cost of living at the national and state levels — 6% and 13% higher, respectively.
Jordan Rosenfeld contributed to the reporting for this article.
Methodology: For this study, GOBankingRates analyzed cities across the country to find the best cities to buy a home for less than $500k. First GOBankingRates found the average single family home values for the last 12 months as sourced from Zillow Home Value Index. To qualify for this study the home value had to be below $500k for the last 12 months and also have an average value below $500k for the last 12 months. Using the national 30 year fixed rate mortgage rate, as sourced from the Federal Reserve Economic Data, and assuming a 10% downpayment, the average mortgage cost can be calculated. By using Sperlings BestPlaces, the cost of living indexes can be found for each city and using the average expenditure costs, as sourced from the Bureau of Labor Statistics Consumer Expenditure Survey, the average expenditure cost for each city can be calculated. The Livability index was sourced from AreaVibes for each city on the list. The median household income was also found for each city as sourced from the US Census American Community Survey. The livabiliy index was scored and weighted at 1.00, the median household income was scored and weighted at 1.00, and the cost of living index was scored and weighted at 1.00. All the scores were combined and sorted to show the best places to buy a home for less than $500k. All data was collected on and is up-to-date as-of April 11th, 2024.
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This article originally appeared on GOBankingRates.com: The 25 Best Cities To Buy a Home for Less Than $500K
