Is the dream of owning your own home starting to feel like a distant fantasy? You're not alone. Between rising prices and interest rates that seem to have a mind of their own, stepping onto the property ladder feels more like scaling Mount Everest these days. But before you throw in the towel and resign yourself to renting forever, let's talk about some good news.
Believe it or not, the most affordable places for buying a home in 2025 might be closer than you think, and homeownership is still a realistic goal for many. In fact, recent data suggests that in over half of the housing markets across the US, buying a home could actually be more affordable than renting. Yes, you read that right!
Now, before you start packing your bags and searching for moving boxes, let's unpack this a bit (pun intended!). According to a recent report from ATTOM, a leading property data and analytics firm, owning a home is financially less burdensome than renting a three-bedroom property in a significant portion of the country.
This might come as a surprise in today's market, but let's delve into why this is the case and pinpoint those golden locations where your homeownership dreams can still take root without breaking the bank.
Most Affordable Places for Buying a Home in 2025: Is the American Dream Still Alive?
The Great Affordability Paradox: Owning vs. Renting in 2025
Let's be honest, the headlines often scream about unaffordable housing, and it's easy to feel discouraged. We hear about bidding wars, sky-high prices, and the struggle to save for a down payment. But the reality is nuanced, and focusing solely on price tags paints an incomplete picture. The ATTOM 2025 Rental Affordability Report sheds light on a crucial aspect: affordability isn't just about the initial price, it's about what portion of your income goes towards housing costs.
This report, which analyzed 341 county-level markets with sufficient data, reveals a fascinating trend. While both owning and renting are putting a strain on household budgets – often consuming a hefty 25% to 60% of average wages – the scales are tipping in favor of homeownership in many areas.
Specifically, in nearly 60% of the markets studied, the major expenses associated with owning a typical single-family home require a smaller chunk of the average paycheck compared to renting a three-bedroom residence. This is a significant finding, and it challenges the prevailing narrative of renting being the more economical option.
Rob Barber, CEO of ATTOM, puts it quite bluntly: “Buying or renting a home in the U.S. these days can be like searching for a diamond in a pile of marbles, and it’s only getting worse in most markets as the cost of both goes up.” He's right – it’s tough out there. However, he also highlights the silver lining: “…in most parts of the country, homeownership is somewhat more attainable for those who can gather the necessary resources to cover down payments…”
The down payment hurdle remains a significant barrier, especially when we're talking about figures that can easily surpass $200,000 in some markets. But once you clear that hurdle, the ongoing costs of ownership can surprisingly be more manageable than rent in many places.
Why is Owning Becoming More Affordable Than Renting in Some Areas?
You might be scratching your head right now. How can owning a home, with all its associated costs like mortgage payments, property taxes, insurance, and potential maintenance, be cheaper than renting? The answer lies in the dynamics of the housing market and how prices and rents are behaving differently.
The ATTOM report highlights a crucial trend: median home prices have generally risen faster over the past year than average rents across the country. In fact, in 66% of the counties analyzed, home prices have increased more or declined less than rents for three-bedroom properties. This means that while home prices might seem intimidatingly high upfront, the rate of increase in rents is catching up, and in some cases, exceeding the pace of home price growth.
Think about it this way: your mortgage payment, once locked in (especially with a fixed-rate mortgage), remains relatively stable over time. Property taxes and insurance can fluctuate, but they are generally more predictable than rent hikes. Rent, on the other hand, is subject to market forces and landlord decisions, and we've seen significant rent increases in many areas over the past few years. This dynamic is shifting the affordability equation in favor of homeownership in certain regions.
Regional Affordability Hotspots: Where Homeownership Still Makes Sense
The affordability picture isn't uniform across the US. As the ATTOM report points out, there are significant regional disparities. If you're looking for the most affordable places to buy a home in 2025, you should definitely set your sights on the Midwest and the South.
- The Midwest is the King of Affordable Homeownership: According to the report, in a whopping 80% of the Midwestern counties analyzed, owning a home requires a smaller portion of average wages compared to renting. This region is consistently highlighted as the most affordable for homebuyers. Think of states like Ohio, Michigan, Illinois, and Pennsylvania (parts of it considered Midwestern). These areas often have a lower cost of living overall, which translates to more affordable housing markets.
- The South is a Strong Contender: The South comes in second, with around 60% of counties favoring homeownership affordability over renting. States like Alabama, Florida, and Texas (especially outside of major metropolitan hubs like Austin) offer pockets of affordability.
- The Northeast is Mixed: The Northeast presents a more balanced picture, with about half of the counties analyzed showing homeownership as the more affordable option. While areas around major cities like New York City can be incredibly expensive, there are still pockets of relative affordability in states like Pennsylvania and even parts of New York state outside of the city center.
- The West: Renters' Paradise (Mostly): The West stands out as the outlier. In this region, renting is generally the financially easier choice. Around 80% of western markets favor renting over buying. This is largely driven by the high home prices in states like California, Hawaii, and Colorado, which often outpace local wage growth significantly.
Diving Deep: Counties Where Owning is Significantly More Affordable
Let's get specific and pinpoint some of the counties where the gap between owning and renting affordability is the widest. These are the locations where your homeownership dollar can stretch the furthest.
Remember, these figures are based on data from ATTOM and the Bureau of Labor Statistics, comparing major homeownership expenses (including mortgage, taxes, insurance, etc.) to average local wages, and average three-bedroom rents to average local wages.
Counties with the Biggest Affordability Gaps Favoring Homeownership:
| County | Owning (% of Wages) | Renting (% of Wages) | Affordability Gap |
|---|---|---|---|
| Suffolk County, NY (outside NYC) | 59% | 159% | 100% |
| Atlantic County, NJ (Atlantic City) | 48% | 111% | 63% |
| Collier County, FL (Naples) | 79% | 127% | 48% |
| Indian River County, FL (Vero Beach) | 47% | 83% | 36% |
| Charlotte County, FL (Punta Gorda) | 43% | 69% | 26% |
- Suffolk County, NY (Outside NYC): This might surprise you given New York's reputation for high costs. But outside of the immediate city, in areas like Long Island's Suffolk County, the report highlights a massive disparity. Owning a home here consumes about 59% of average local wages, while renting a three-bedroom property devours a staggering 159%! This suggests that while initial home prices might be high, rents are even more out of sync with local incomes.
- Atlantic County, NJ (Atlantic City): Atlantic City and its surrounding areas in Atlantic County, NJ, also show a significant gap. Owning requires about 48% of wages, while renting eats up 111%. This could be due to a variety of factors, including the local economy and the type of rental properties available.
- Florida Counties (Collier, Indian River, Charlotte): Several Florida counties, including Collier (Naples), Indian River (Vero Beach), and Charlotte (Punta Gorda), pop up as surprisingly more affordable for homeowners. While Florida has seen a surge in popularity and prices, in these specific areas, the report suggests that owning still offers a better affordability proposition than renting.
Large Counties (Population over 1 Million) with Affordability Gaps Favoring Homeownership:
| County | Owning (% of Wages) | Renting (% of Wages) | Affordability Gap |
|---|---|---|---|
| Riverside County, CA | 71% | 91% | 20% |
| Wayne County, MI (Detroit) | 15% | 22% | 7% |
| Cook County, IL (Chicago) | 31% | 36% | 5% |
| Allegheny County, PA (Pittsburgh) | 21% | 25% | 4% |
- Riverside County, CA: Even in California, known for its expensive housing, Riverside County stands out. Owning a home here takes about 71% of wages, while renting requires 91%. This suggests that while still pricey, homeownership in Riverside County might be a slightly less painful financial burden compared to renting.
- Wayne County, MI (Detroit): Detroit, specifically Wayne County, emerges as a surprising leader in affordability. Owning a home in Wayne County consumes only 15% of average wages, while renting takes 22%. Detroit's revitalization and relatively lower housing costs make it a very attractive option for budget-conscious homebuyers.
- Cook County, IL (Chicago) & Allegheny County, PA (Pittsburgh): Major metropolitan areas like Chicago (Cook County) and Pittsburgh (Allegheny County) also show a slight advantage for homeowners, with owning being marginally more affordable than renting.
Counties Where Renting Holds the Affordability Edge
Of course, there are areas where renting remains the more financially sound choice. These are often high-cost urban centers where home prices are exceptionally high.
Counties with the Biggest Affordability Gaps Favoring Renting:
| County | Renting (% of Wages) | Owning (% of Wages) | Affordability Gap |
|---|---|---|---|
| Alameda County, CA (Oakland) | 48% | 87% | 39% |
| Honolulu County, HI | 64% | 103% | 39% |
| San Mateo County, CA | 31% | 69% | 38% |
| Santa Clara County, CA (San Jose) | 27% | 64% | 37% |
| Loudoun County, VA | 45% | 81% | 36% |
- California Counties (Alameda, San Mateo, Santa Clara): No surprise here, California dominates the list of counties where renting is more affordable. Alameda County (Oakland), San Mateo County, and Santa Clara County (San Jose), all in the Bay Area, show significant gaps favoring renters. The tech boom and subsequent sky-high home prices have made homeownership incredibly expensive in this region.
- Honolulu County, HI: Hawaii, with its limited land and high demand, also makes renting the more affordable option. Honolulu County shows a substantial gap, with renting consuming 64% of wages compared to 103% for owning.
- Loudoun County, VA: Even areas outside of major metros like Washington, DC, can be surprisingly expensive. Loudoun County, VA, near DC, shows a significant gap favoring renting, suggesting that home prices in the DC suburbs are outpacing rent increases.
The Most Affordable Markets for Owning: Midwest Leads the Way
If you're solely focused on finding the absolute most affordable markets for owning a home, the Midwest is your best bet. The report highlights counties where major ownership expenses consume the smallest percentage of average local wages.
Most Affordable Counties for Owning:
| County | Owning (% of Wages) |
|---|---|
| Jefferson County, AL (Birmingham) | 15% |
| Wayne County, MI (Detroit) | 15% |
| Peoria County, IL | 15% |
| Montgomery County, AL | 16% |
| Mobile County, AL | 17% |
- Alabama Counties (Jefferson, Montgomery, Mobile): Alabama takes the crown for affordability, with Jefferson County (Birmingham), Montgomery County, and Mobile County topping the list. These areas offer incredibly accessible homeownership, requiring only 15% to 17% of average wages for major ownership expenses.
- Wayne County, MI (Detroit) & Peoria County, IL: Detroit (Wayne County) continues to impress with its affordability, tied at the top of the list. Peoria County, IL, also joins the ranks as one of the most affordable places to own a home.
Affordable Large Counties (Population over 1 Million) for Owning:
| County | Owning (% of Wages) |
|---|---|
| Wayne County, MI (Detroit) | 15% |
| Allegheny County, PA (Pittsburgh) | 21% |
| Cuyahoga County, OH (Cleveland) | 21% |
| Harris County, TX (Houston) | 26% |
| Philadelphia County, PA | 28% |
- Detroit, Pittsburgh, Cleveland, Houston, Philadelphia: These major cities represent a mix of Midwestern, Southern, and Northeastern locations, all offering relatively affordable homeownership compared to other large metros.
Most Affordable Rental Markets: Midwest Still Dominates
Unsurprisingly, the Midwest also shines when it comes to affordable rental markets. If you're not quite ready to buy, or prefer the flexibility of renting, these areas offer the most bang for your buck.
Most Affordable Counties for Renting:
| County | Renting (% of Wages) |
|---|---|
| Black Hawk County, IA (Waterloo) | 20% |
| Wayne County, MI (Detroit) | 22% |
| Genesee County, MI (Flint) | 23% |
| Jefferson County, AL (Birmingham) | 23% |
| Hinds County, MS (Jackson) | 23% |
- Iowa, Michigan, Alabama, Mississippi: States like Iowa, Michigan, Alabama, and Mississippi offer the most affordable rental markets, with Black Hawk County, IA (Waterloo) leading the pack, requiring only 20% of average wages for a three-bedroom rental.
Affordable Large Counties (Population over 1 Million) for Renting:
| County | Renting (% of Wages) |
|---|---|
| Wayne County, MI (Detroit) | 22% |
| Cuyahoga County, OH (Cleveland) | 25% |
| Allegheny County, PA (Pittsburgh) | 25% |
| Philadelphia County, PA | 27% |
| Santa Clara County, CA (San Jose) | 27% |
- Detroit, Cleveland, Pittsburgh, Philadelphia, San Jose (Surprisingly): While San Jose (Santa Clara County) is expensive for homeownership, it appears more affordable for renting compared to other California markets, ranking among the most affordable large counties for renters nationally.
Wage Growth vs. Housing Cost Growth: A Critical Factor
The affordability picture is constantly evolving, and understanding how wages are keeping pace (or not keeping pace) with housing costs is crucial. The ATTOM report provides insights into this dynamic as well.
- Wages Growing Faster Than Rents in Most Markets: Good news! In 72% of the counties analyzed, average wages are increasing more or declining less than average rents. This is a positive sign for renters, as their earning power is generally keeping up with or exceeding rent increases in a majority of markets.
- Home Prices Increasing Faster Than Wages in Half the Nation: However, the flip side is that in 52% of counties, median home prices are going up more or declining less than average wages. This means that for potential homebuyers in these areas, affordability is still a challenge, as home prices are outpacing wage growth in a slight majority of markets.
Important Note: While wages are generally growing faster than rents, and in some areas, homeownership is becoming relatively more affordable, the overall housing affordability situation remains challenging for many Americans. The report emphasizes that major homeownership expenses require more than one-third of average local wages in 68% of the counties analyzed, and average rents require more than one-third of wages in 76% of counties. Housing costs are still a significant burden for a large portion of the population.
My Takeaway: Homeownership Dreams Are Still Achievable, Especially in the Heartland
As someone who has been observing the real estate market for years, I find these findings both encouraging and realistic. While the national headlines might paint a bleak picture of housing affordability, the ATTOM 2025 Rental Affordability Report offers a more grounded and localized perspective. It clearly demonstrates that the most affordable places for buying a home in 2025 are concentrated in the Midwest and to a lesser extent, the South.
If you're serious about homeownership and are willing to consider locations outside of the ultra-expensive coastal markets, your dream is absolutely within reach. Cities like Detroit, Birmingham, Pittsburgh, and Cleveland are not just affordable; they are also experiencing revitalization and offer vibrant communities with a lower cost of living overall. These are places where your hard-earned money can go further, not just in housing, but in your overall quality of life.
Of course, the down payment remains a major hurdle. Saving for that 20% down payment (or even a smaller percentage) is still a significant undertaking. But knowing that once you overcome that hurdle, your monthly housing costs might actually be less than renting in many of these affordable markets is a powerful motivator.
So, don't let the national housing doom and gloom discourage you. Do your research, explore the markets highlighted in this report, and consider broadening your location horizons. The American dream of homeownership is still alive and well, particularly in the heartland of the country. It might just require a shift in perspective and a willingness to explore opportunities in the most affordable places for buying a home in 2025.
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