Where renters can become home buyers — without breaking the bank

The nation’s most affordable markets

Home prices may be rising, but they’re not yet out of reach for the average renter. In fact, home buyers willing to move to Detroit — as well as a few other Midwest and Southern towns — can actually find quite a steal.

Havens for home buyers

First American recently analyzed the nation’s 50 largest markets to determine where homes were most affordable for the average renter.

Detroit came out on top as the most affordable city for renters-turned-home buyers. Nearly 90 percent of homes in the city are within the average renter’s price range. This renter, according to First Am’s data, has an income of $43K and home buying power of $265,000.

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According to First Am’s Odeta Kushi, housing demand is just lower in the area — which helps push down prices.

“Detroit’s high housing affordability can be attributed to less demand and excess supply,” Kushi wrote. “It has one of the highest home vacancy rates in the U.S.”

Also in the top for affordability were Cleveland; Oklahoma City, Oklahoma; Kansas City, Missouri; and Tampa, Florida. In all four, 80 percent of the area’s housing inventory is affordable to the average renter.

Where rent prices have jumped the most

Out of reach for renters

Unsurprisingly, San Francisco clocked in as the least affordable place for renters. Though area renters have an average income of $65K and home buying power of $400,000, only a mere 2 percent of listings fell within that range. The median home price in the area is $1.24 million.

According to Kushi, the affordability crunch is likely due to the close location of Silicon Valley.

“One reason for the low affordability in the Bay Area is the strength of the technology-driven labor market, which has generated a large concentration of highly paid employees competing for limited housing supply,” Kushi wrote.

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Ready to get out of the rent race and buy in one of these more affordable cities? Shop around and see what mortgage rates you qualify for today.