The most affordable areas to buy a home when you’re expecting a baby

Erik J. Martin
Erik J. Martin
The Mortgage Reports Contributor
June 5, 2019 - 4 min read

Yes, it’s really cheaper to have a baby in some places than others

When you’re expecting a baby, it can be an exciting time. Yet it can also be stressful.

That’s especially true if you’re concerned about raising a family in the right home. Many soon-to-be parents strive to buy a home and stop renting. But they may not be able to afford a home in their current location.

That’s why it pays to at least consider the least expensive city in which to have a baby.

A new report lists the most affordable metros for expectant parents. The least expensive city to have a baby may surprise you.

What the research found

The most expensive purchase most people make is often a home. But raising a child isn’t cheap, either. Redfin reports that two-parent households spend over $230,000, on average, on a child from birth to age 17.

A fresh study by Redfin aimed to determine the least expensive city to have a baby. The top 10 most affordable metros are*:

  1. Birmingham, Alabama ($16,383 spent on baby’s first-year costs; $1,378 mortgage difference between a two- to three-bedroom single-family home)
  2. Little Rock, Arkansas ($16,565; $692)
  3. Charleston, South Carolina ($16,566; $579)
  4. Louisville, Kentucky ($16,749; $1,344)
  5. New Orleans, Louisiana ($17,148; $461)
  6. Tulsa, Oklahoma ($18,192; $673)
  7. Oklahoma City, Oklahoma ($18,250; $731)
  8. Austin, Texas ($18,476; $227)
  9. Nashville, Tennessee ($18,552; $881)
  10. Atlanta, Georgia ($18,639; $1,165)

*Based on the cost to raise a baby in the first year (including child care, health care, and supply costs); also based on the cost to upgrade from a two- to a three-bedroom single-family home.

By contrast, the most expensive cities in which to have a baby were: Washington, D.C., ($35,017 spent during the child’s first year); Boston ($31,307); and Worcester, Massachusetts ($30,610).

Redfin chief economist Daryl Fairweather says this is the first time Redfin looked closely at the cost of a baby in the first year.

“There’s been a lot of debate politically lately about the cost of childcare. We wanted to see how big of a problem this was across different metros,” she says. “We also wanted to consider the hidden costs of having a baby like getting a bigger home.”

Why buying may be worth it

Fairweather says it makes sense for expectant parents to consider buying a home instead of renting and possibly moving to another city. That’s due to many factors.

“When you have a child, that’s when you want to lay down roots and settle down. Most parents don’t want to uproot their child and move around. And that gets a lot more difficult to do as the child gets older,” she notes. “So it can be worthwhile to think about moving up relocating now, before the child is born.”

There’s a big practical reason why soon-to-be parents want to ponder these matters now: space. You may need more room than a rental can allow. Plus, a backyard can provide a great play area for your child.

“Also, buying a single-family home is smart, if you can afford it,” Fairweather says. “If you own, you know that the home is yours to keep. You don’t have to worry about rental rates going up. And there aren’t as many single-family home available to lease as there are for sale.”

Also, “kids can be messy and destructive. They may cause you to lose your rental security deposit. That’s one more reason to buy versus rent,” she says.

Finding the right home

Problem is, you may not be able to afford the right sized home. Any parent would want a large enough house in which their family can grow. But first-time buyers may have to sacrifice space for a first chance at ownership.

That’s why moving to a more affordable but faraway market—like the least expensive city to have a baby, where you may get more home for your dollar—could be a good idea.

“Say you choose a more expensive metro. Your best option may be to buy what you can afford, even if it’s smaller,” adds Fairweather. “That way, you can gain equity, avoid rental sticker shock, and move on to a second home later when you’re ready.”

Explore your options

But it’s important to plan any move carefully. Most experts suggest staying put for a while before moving. Otherwise, you likely won’t recoup the costs of buying—including moving and closing costs.

“Ideally, you want to stay in your home at least five years to prevent losing money on the transaction,” Fairweather notes.

Ralph DeFranco is chief economist at the mortgage group of Arch Capital Insurance. He believes most people are better off buying as soon as possible—ideally a home large enough to accommodate any plans for more children.

“It’s a mistake to not stretch enough to get a house that you can enjoy for as long as you would like. I’m not saying you should starve,” he says. “But it’s a much better decision, in the long run, to put your money into housing than other things, like a nice car or vacations.”

Consider, DeFranco adds, “that housing prices are far more likely to continue to increase. So it’s best to buy as soon as you can and start building equity.”

Another reason to buy a bigger home from the get go? “You’ll save yourself the huge cost and hassle of moving to a larger home later if you need to.

Perform your due diligence

Before committing to live in any market, do your homework.

“Avoid a massive commute to work just to get into a larger house. Live close to someone you know who can help share childcare duties,” recommends DeFranco.

In addition, “choose a location near parks, good schools, and less traffic for the good of your child, too,” he says.

Thinking of buying a home?

Buying a home — especially in an affordable area — could be the right choice for families.

Get started on your home buying journey in minutes below.

Popular Articles

The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.