Nationwide, demand for housing continues to far outpace low levels of inventory, driving prices sky-high and beyond peaks set during the last housing boom. Growth in mortgage rates, which are expected to continue to rise throughout the year, has also added burdens for homebuyers in terms of how much they can afford to buy.
However, a strengthened economy has paved the way for job and income increases, putting more money in the pockets of consumers. And in cities with lower median house values and steadying price growth, purchasing power is not in as much danger as other more costly markets.
A First American analysis of home values that factors in local wages and mortgage interest rates in large cities found a 6.4% price increase nationally in March. But, in some markets, like Washington, D.C., home prices have steadied or even declined, according to First American’s Real Home Price Index.
Here’s a look at the 12 best cities for housing market purchasing power. The data, from First American’s RHPI, measures home price changes, taking local wages and mortgage rates into account “to better reflect consumers’ purchasing power and capture the true cost of housing.”
The March 2018 data is ranked by smallest year-over-year changes in RHPI for cities where the current value is less than 100 (an RHPI reading of 100 is equal to housing conditions in January 2000).