Free Money Finance: How to Buy a Home You Can Afford

by NA

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While I can’t wave a magic wand and make homes affordable in high-cost regions, those of you who are currently renting in the Northeast and California may need to consider finding a home in an affordable region that could also be a good investment because the local economy is strong. That was the subject of my first book, The Cost-Conscious Home-Buyers’ Guide, published in 1991.

The solution to the affordability crisis now is the same as it was when I wrote that book: if you can’t stand the heat, get out of the kitchen. If homes are unaffordable where you live, consider moving to where they are affordable.

For my first book I selected 20 areas within shooting distance of the national median home price at that time, $93,000. I also selected destinations that were judged to be among the 100 fastest growing between 1977 and 1987 by the forecasting firm of Data Resources Inc. in Metro Insights. Finally, I eliminated all metro areas that scored lower than 100 in the Places Rated Almanac’s “overall category,” which took into account education, culture, climate, crime rate, and other factors in all metro areas.

As in my first book, in this chapter I am ranking locations by Places Rated Almanac’s ranking of “best places to live” features—because you want to look for not just a job and an affordable home but a desirable destination that will attract potential buyers of your home. To meet my criteria, the regions had to rank in the top 100 of the 379 regions nationwide.

Unfortunately, most of the regions I had picked for my first book either have become so unaffordable that they would no longer qualify or have become “riskier investments” due to the slumping 2008–2009 economy. In addition, because home prices have become ever more unaffordable, I needed a huge amount of wiggle room on home prices—more than tripling the ceiling to $300,000 because if I moved it any lower I’d lose too many top Places Rated Almanac rankings. Yep, that’s how much home prices skyrocketed in 18 years! (All median home prices are from the National Association of Realtors.)

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