When it comes to buying a home, your experience in San Jose, CA is likely to be much different than in Pittsburgh, PA, according to new data from Home Bay.
In some cities, buying is affordable, accessible, and a normal rite of adult passage. In other cities, you’re more likely to be a long-term renter.
Learn the 10 best and 10 worst cities to buy a home.
10 Homebuyer-Friendly Cities
In some American cities, you’d be doing yourself a disservice if you didn’t at least seriously consider buying a home. Learn about the 10 most home-buyer-friendly cities in the U.S. and what makes them stand out.
1. Pittsburgh, PA
Pittsburgh gets flattering headlines for swapping steel and soot for universities and hospitals. Based on the study’s data, western Pennsylvania’s biggest city also gets high marks for buying a home.
Indeed, in Pittsburgh, the typical monthly mortgage payment is $1,233, the lowest of any major city. Monthly rent, meanwhile, averages $1,333, meaning that renters in Pittsburgh pay more in monthly housing costs than homeowners, who also build equity.
Pittsburgh’s low monthly mortgage payments are a result of the lowest average home price in the U.S., $188,419 – less than half of the $416,165 national average.
2. New Orleans, LA
New Orleans is good for more than Mardi Gras and jambalaya. In Home Bay’s study, it’s the second-best U.S. city in which to buy a home.
In New Orleans, the typical monthly mortgage payment is $107 less than the average monthly rent. That’s the most buyer-friendly monthly difference between mortgage and rent in the entire U.S.
New Orleans also has below-average home prices – $227,190 on average, which means that buying won’t break the bank.
3. Chicago, IL
Chicago is sometimes called the Second City, but it ranks third in the study of best places to buy a home in the U.S.
Chicago stands out with mortgage payments that are on average $46 fewer per month than rental payments. While homes in Chicago are more expensive than those in Pittsburgh and New Orleans, buyers can at least anticipate favorable long-term returns. Since 2016, the average Chicago home value has grown from $188,180 to $279,202.
4. Cleveland, OH
Cleveland has a low cost of living and a high ranking among the best American cities to buy a home.
Cleveland’s biggest selling point is price, as homes there only cost $200,015 on average. And Clevelanders who want to buy a home but aren’t quite ready don’t have to stress, as home prices have increased 64.4% from 2016 to 2023, which is below the average national home price growth of 78.1%.
5. Memphis, TN
Graceland isn’t for sale, but Memphis is still ranked as the fifth-best American city in which to buy a home.
Homeowners in Memphis pay $27 less per month on mortgage payments than renters pay to their landlords. Plus, monthly mortgage payments in Memphis are well below the national average at $1,462.
6. Miami, FL
Compared to cities such as Pittsburgh and Cleveland, home prices in Miami – which average $444,989 – are high. Regardless, Miami is ranked by Home Bay as the sixth-best home-buying city in the U.S.
Miami is a better city to buy than to rent because it has a low price-to-rent ratio, which is a measure used to evaluate the affordability of buying versus renting. Due to high rent prices, Miami’s price-to-rent ratio is 13 – among the lowest in the nation, cementing it as a buyer-friendly city.
7. Detroit, MI
So long as you can stand the cold, Detroit is one of the best places in America to buy a home. As with other Rust Belt cities on the list, Detroit’s buyer-friendliness is a result of lower-than-average home prices. The average home in Detroit only costs $223,022.
8. Oklahoma City, OK
Being a home buyer in Oklahoma City is more than OK. That’s because the typical monthly mortgage payment in Oklahoma City is only $1,424. Those low monthly mortgage payments are indicative of a low overall cost of housing in Oklahoma’s capital, as typical monthly rents there go for a rock-bottom $1,306 average.
9. St. Louis, MO
St. Louis is the ninth-best city in America to buy a home, according to Home Bay’s data. Home prices in St. Louis only average $221,941, and they don’t seem likely to skyrocket in the future. Since 2016, St. Louis’s home prices have increased by only 58.1%, which is among the lowest price increases in the nation.
10. Tampa, FL
Tampa is the tenth-best city in the country and the second-best city in Florida in which to buy a home, according to the study.
In Tampa, average monthly mortgage payments are less than $300 more than the average monthly rent, which indicates buyer-friendliness. But if you want to buy in Tampa, you probably want to do it quickly. Since 2016, Tampa home prices have risen by an astonishing 117.9% – tops in the country.
10 Cities Where Buying a Home is a Hassle
In some cities, it may feel as if winning the lottery is easier than buying a home. Here are the 10 worst home-buying cities in the U.S., according to Home Bay’s data.
1. San Jose, CA
San Jose may often be overshadowed by neighboring San Francisco and Oakland, but it stands a cut above them in one unfortunate designation: According to the study, it’s the single worst city in the U.S. to buy a home.
In 2023, San Jose’s price-to-rent ratio clocked in at 38 – more than three times Pittsburgh’s price-to-rent ratio of 12. The trouble in San Jose starts with a high average home price of $1,431,676, but it doesn’t end there. The study found that on average, to save for a down payment and mortgage payments in San Jose would take 450 months of rent payments. That’s nearly 38 years.
It may be easier to rent than buy in San Jose, but you might have to break your piggy bank. In addition to the highest home prices in the nation, San Jose has the highest average monthly rent prices – a whopping $3,181 on average. Still, renters in San Jose pay on average $6,190 less in rent than homeowners do on their mortgage payments.
2. San Francisco, CA
People seeking shelter from the home-buying woes in San Jose will need to go further than up the road to San Francisco, according to Home Bay’s study.
The study found San Francisco to be the second worst city to buy a home in America. Home prices in the Bay Area are brutal – with an average home price of $1,094,639, San Francisco is the only city other than San Jose with average home prices over $1 million. Plus, San Franciscans get barely any relief on their monthly mortgage payments, which clocks in at a $3,076 monthly average.
3. Seattle, WA
Things sure are tough for home buyers on the west coast. North of San Francisco and San Jose, Seattle comes in as the third worst home-buying city in the U.S. in the study.
Seattle’s average monthly home price – $689,871 – is substantially lower than in the two Bay Area cities. But Seattle is tough for buyers because home prices are rising fast. From 2016 to 2023, Seattle’s average home price rose by 84.2%, which is above the national average.
4. Denver, CO
Denver is the home of Rocky-Mountain-high home prices. Indeed, Denver’s average home price is $573,571. With high home prices come high monthly mortgage payments, and Denver is no exception, as homeowners pay $3,755 per month on average on their mortgage.
In Denver, renting is less expensive: The average monthly rent there is $1,950, which means renters pay close to $2,000 less per month for housing than those who buy a home.
5. Los Angeles, CA
In a sign of hard home-buying times in the Golden State, Los Angeles is the fifth worst city to buy a home in the U.S. and the third worst in California.
Interestingly, the study found that the three cities with the largest differences between monthly mortgages and rents were in California. Los Angeles isn’t as bad as San Jose and San Francisco, but buyers still pay a penalty compared to renters, as monthly rent is on average $2,802 less expensive than mortgage payments.
6. Salt Lake City, UT
In Salt Lake City, things are getting tougher for home buyers. From 2016 to 2023, home prices grew by 93.3%, nearly doubling the cost of buying a home. Plus, the difference between renting and buying in Salt Lake City is stark: It costs $1,686 more per month to pay a mortgage than rent a property, according to the data.
7. San Diego, CA
Sunny San Diego can feel gloomy if you’re trying to afford a home. That’s because San Diego has the fourth most expensive monthly mortgage in the entire country, with a $5,469 average payment. Amazingly, San Diego has the fourth most expensive monthly mortgage payments in the country and California, being outranked by only San Jose, San Francisco, and Los Angeles.
8. Portland, OR
In Portland, it’s much less expensive to rent than to buy. According to the study, the average monthly rental costs in Portland are $1,861. Average monthly mortgage payments? Try $3,459. That means homeowners pay about twice as much in monthly housing costs as renters.
9. Austin TX
Austin isn’t the biggest city in Texas, but it is the most difficult one in which to buy a home. The Home Bay study found that the average home price in the city once known for being funky and eclectic is approaching $500,000 and that the home-to-price ratio is an unflattering 22.
10. Sacramento, CA
The list of the 10 worst American cities to buy a home ends close to where it began: northern California. This time, it’s Sacramento, with an average home price of $552,756, checking in as a brutal home-buying locale.
California, with five of the 10 worst cities to buy a home, is the pits for home buyers. But if Americans feel as if they’re stuck renting, it’s understandable. In only five cities nationwide is it less expensive to pay a mortgage than rent, and across the country, home prices are increasing. Facing an uncertain economy and challenges paying down debt and balancing their budgets, Americans’ success at purchasing homes will likely be highly location-dependent.