Here Are the Most Affordable Locations for Purchasing a Home

Anyone hunting for a house knows how expensive properties have become. Indeed, high prices nowadays are making it increasingly difficult for purchasers – especially first-time buyers – to afford a home. However, a new study found that homeownership can actually be more affordable than renting in many instances, and deals can be found in several different areas of the country.

Read on to learn more about the interesting takeaways from this report and the steps you can take to find and afford a home purchase in 2025.

What the report reveals

ATTOM’s recent 2025 Rental Affordability Report indicates that, in nearly 60% of U.S. counties analyzed, owning a home is more affordable than renting a three-bedroom property, despite rising home prices.

The report highlights that both homeownership and renting remain financially challenging for the average U.S. worker, often representing between 25% and 60% of their earnings. However, in nearly three-fifths of the 341 analyzed county-level markets, the cost of major homeownership expenses for a typical single-family home comprises a smaller share of wages versus renting a three-bedroom property. For those who can afford a down payment, buying a home tends to be the more budget-friendly option—even though median home prices have generally increased at a faster rate than rents over the past year.

The report further shows that buying a home is most affordable in the Midwest and South, with the Northeast following behind. In the Midwest, homeownership demands a lower percentage of average wages in approximately 80% of the counties studied, while this holds true for 60% of counties in the South and about half in the Northeast. The West, however, stands apart from this pattern—renting remains the more cost-effective choice in nearly 80% of Western markets.

ATTOM’s study also lists the 10 counties where it’s most affordable to own a home today (among counties with a population of 100,000 or more, 100 or more sales, and sufficient rental data). They are, in order:

How to interpret these findings

Rob Barber, CEO of ATTOM, explains that, while both renting and owning strain average wage earners, major homeownership costs – including mortgage payments, property taxes, and insurance – currently take up a smaller share of wages than the average rent for a three-bedroom unit.

“Consider that the affordability gap between homeownership and renting is primarily driven by how much of the average local wage is consumed by each housing option,” he says. “While home prices have risen faster than rents over the past year, this shift has not yet been significant enough to make renting the more affordable option in most areas. However, if home prices continue to outpace rents in 2025, this trend could change.”

Nadia Evangelou, senior economist and director of Real Estate Research for the National Association of Realtors (NAR), notes that homeowners are significantly less cost-burdened than renters.

“Only 23% of homeowners spend more than 30% of their income on housing compared to almost half of renters, who are considered cost-burdened,” says Evangelou. “Affordability depends largely on household income, but for those who can qualify for a mortgage, homeownership provides long-term financial stability. Unlike renters, who face rising rents year after year, homeowners benefit from fixed mortgage payments, making their housing costs more predictable over time.”

Additionally, in many markets – especially for bigger homes – purchasing can cost less per square foot than renting a comparable home, she adds, further reinforcing the financial benefits of homeownership.

The fact that homeownership can often be more financially manageable versus renting reflects a complex interplay of mortgage interest rates, property tax policies, and local economic stability, according to Dennis Shirshikov, a professor of economics and finance at City University of New York/Queens College.

“For example, in certain Midwestern counties, steady wage growth and relatively stable property tax rates help keep mortgage payments a smaller portion of household income compared to rent. This highlights the potential long-term benefits of investing in a home rather than continuously paying rental premiums in volatile urban markets,” he continues.

Breaking down the most affordable list

What is it about the most affordable counties mentioned above that help them earn a spot on the top 10 list? Several different factors are at play, and the pros agree.

“The most affordable counties for homeownership share a key characteristic: low home prices, with median single-family values under $200,000 in 2024. This affordability makes them particularly attractive for first-time buyers, as lower prices mean smaller down payments and reduced monthly mortgage costs,” Barber says. “Also, many of these counties are in the Midwest, where housing remains among the most budget-friendly in the nation. Buyers in these areas can benefit from a lower cost-of-living while building equity – making homeownership a more attainable and financially sound option compared to renting.”

Rachel Stringer, a real estate agent at Raleigh Realty, isn’t surprised by many of the areas that made the list.

“Take Jefferson County in Alabama. Living costs in the Birmingham region tend to be lower than in many metropolitan areas, and local wages hold up well against real estate expenses,” explains Stringer. “Similarly, Wayne County in Michigan has long been known for its mix of urban and suburban neighborhoods that can offer budget-friendly price points relative to incomes, especially for those looking to build equity in a revitalizing area. And in places like Peoria County, Illinois, or Shelby County, Tennessee, buyers often discover that stable local economies, combined with a reasonable cost-of-living, allow them to afford a mortgage without feeling stretched.”

Evangelou notes that NAR data generally align with many of the most affordable locations in ATTOM’s report.

“Compared to coastal and high-demand metro areas, home prices in states like Illinois and Michigan remain relatively low, making homeownership more attainable for first-time buyers. In addition to affordability, many of these areas benefit from a growing job market and lower cost-of-living,” she says. “We are also seeing significant increases in domestic migration to some Midwest states. For example, Minnesota and Michigan have experienced more than a 50% increase in domestic migration last year, as more people moved to these areas for better affordability, job opportunities, and lower overall cost-of-living.”

Other affordable areas to consider

The 10 counties named above aren’t the only places where homeownership bargains can be had. Evangelou points to several markets in Oklahoma, for instance, that stand out for their affordability and homeownership opportunities. These include Lawton, where half of renters can afford to buy a home, and Tulsa, where one in three renters can swing a home purchase compared to fewer than 25% of renters nationwide.

“Areas in Ohio, Missouri, Indiana, and parts of North Carolina are also becoming more prominent on buyers’ radars,” Stringer notes. “Many of these communities offer revitalized downtowns, a growing roster of local businesses, and a more relaxed pace of life while retaining a cost structure that still feels attainable for many working families.”

Shirshikov nominates other emerging markets in mid-sized cities like Chattanooga, Tennessee, and the suburbs around San Antonio – areas, he says, that are benefiting from diversified local economies and innovative municipal initiatives that support affordable housing.

“But overall, buyers looking for the best value should focus on Midwest markets, where both home prices and cost burdens remain significantly lower than in other regions. Two-thirds to three-quarters of Midwest markets meet the affordability benchmark,” says Barber. “In contrast, affordability challenges are more pronounced in the Northeast, South, and West, where 80% to 90% of counties require more than one-third of local wages for housing.”

How to improve your affordability odds

To increase your chances of finding and affording a home, it’s smart to follow best practices.

“Work on improving your credit, as having a higher credit score will help lower the mortgage interest rate. With a lower rate, you could potentially qualify for a higher purchase price,” suggests Rose Krieger, senior home loan specialist for Churchill Mortgage. “Regarding location, partnering with a trusted agent or Realtor can help expand your options based on your preferred areas. But it might be a good idea to keep an open mind about location.”

Evangelou seconds those sentiments and recommends thinking outside your comfort zone or familiar territory.

“Location flexibility can make a big difference in improving affordability and securing a home in today’s market. Many buyers are already doing this by broadening their search area,” she says.

Give thought to emerging markets as well as non-traditional locations where housing costs are lower and long-term value is more attainable.

“This means utilizing comprehensive market research tools, consulting local real estate experts, and carefully evaluating not just the purchase price but also the ongoing costs such as taxes, maintenance, and insurance,” advises Shirshikov. “It’s also crucial to consider both immediate affordability and long-term financial applications. That means factoring in broader economic trends, job market stability, and potential regional growth opportunities.”