Rejoice, fans of “The Office” — if you’re looking for a home, Scranton, Pennsylvania, is also America’s most affordable housing market, according to a new report.
Zillow Z’s report, +6.23% – which analyzed 100 of the largest housing markets in the US, looking at median household income in that city versus the monthly mortgage payment on a typical priced home – found that the small Pennsylvania town got buyers the best value for money. Scranton is known to TV fans as the setting for the hit comedy ‘The Office’ about a Scranton paper company.
For Zillow’s purposes, “mortgage payment” assumes buyers pay 20% off and take out a 30-year fixed-rate mortgage and pay taxes and insurance.
Scranton topped the list because the monthly mortgage payment required only 22% of the median household income. (Homeowners are considered cost-effective if they spend more than 30% of their income on housing.)
Many of the most affordable markets are in the Rust Belt, Midwest, or South (with the notable exception of Florida, parts of which are very expensive markets today).
Youngstown, Toledo and Akron, all in Ohio, followed as the most affordable markets.
Here are the top 10 most affordable markets:
Scranton, Dad. Youngstown, Ohio Toledo, Ohio Akron, Ohio Jackson, Miss. Pittsburgh, Pa. Harrisburg, Dad. Little Rock, Ark. Indianapolis, Ind. St. Louis, Mo.
With mortgage rates soaring above 7%, affordability of mortgages has become a serious barrier for home buyers, who also continue to struggle with high house prices.
“Monthly payments on a typical American home now take up more than 38% of homeowners’ incomes (including taxes and insurance), the highest share since at least 2005,” Zillow said in the report.
On the other hand, San Francisco are the least affordable markets, where the mortgage payment on a typical home is 83% of the median household income.
That’s followed by Los Angeles, Honolulu, San Diego and Ventura, California.
Do you have ideas about the housing market? Write to MarketWatch reporter Aarthi Swaminathan at [email protected]