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The Best Places for Homeownership

Jan. 21, 2014
Home Search, Mortgages
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Recently, Harvard University’s Joint Center for Housing Studies concluded that one in four households are spending more than 50 percent of their income on rent. Since renting has become a less affordable option, it may make financial sense to consider purchasing a home. With home prices and mortgage rates still relatively low, now is the time to start looking. NerdWallet analyzed the top 100 most populous metro areas to determine which have characteristics that are favorable to homebuyers. Our analysis answers three main questions:

1. Are homes available?  We looked at the metro area’s homeownership rate to determine the availability of homes. A low homeownership rate is likely a signal of competitive inventory, more options for renters rather than buyers and expensive housing. Areas with a high homeownership rate led to a higher overall score.
2. Can you afford to live there? We looked at median household income and monthly homeowner costs to assess whether residents could live comfortably in the area. We used monthly homeowner costs to measure cost of living. Areas with high median incomes and a low cost of living scored higher.
3. Is the area growing? We measured population growth to ensure that the area is attracting new residents and showing signs of solid growth. This is likely a signal of a robust local economy, which is another attractive characteristic for homebuyers.

We separated this list into large, medium-sized and small metro areas to find places that would appeal to all.

The Best Small Metro Areas for Homeownership 

1. Huntsville, Ala.

The Rocket City is the top small metro area on our list with affordable monthly homeownership costs at just 26.6 percent of monthly household income and a high homeownership rate of 70.9 percent.  Huntsville is located in northern Alabama where the Army’s Redstone Arsenal, Cummings Research Park and NASA’s Marshall Space Flight Center anchor the local economy in the technology, space and defense industries. The area is also home to the University of Alabama-Huntsville where tech-focused programs like UAH’s College of Engineering train a highly skilled workforce. The deep talent pool of engineers attracts top employers like Boeing to Huntsville, providing local residents an abundance of job opportunities.

2. Fort Wayne, Ind.

Fort Wayne is the most affordable small metro area on our list with monthly homeownership costs at just 24.5 percent of median household income. The area also has a high homeownership rate at 71.3 percent, making it very likely that those looking to move to the area will have no problem finding a home. Fort Wayne is the second largest city in Indiana and is located in the northeastern part of the state. Though the area has historically been known as a manufacturing hub, its economy is diverse with top employers such as Parkview Health Systems, General Motors and Lincoln Financial Group in the area. Greater Fort Wayne is a three time winner of the All-America City award and has been nationally recognized as a great place for families given its affordability, low crime rate and great school system. 

3. Myrtle Beach-North Myrtle Beach-Conway, S.C. 

Myrtle Beach-North Myrtle Beach-Conway is one of the fastest growing small metro areas on our list with population growth of 2.2 percent. The area’s high rate of homeownership and affordable housing make it a great place to settle down.  The area is popular among retirees for its tax-friendliness, access to health care and abundance of recreational activities. Myrtle Beach is located in the heart of the Grand Strand and has received recognition as a top travel destination with popular tourist attractions including Myrtle Waves, the Myrtle Beach boardwalk and more than 100 golf courses. Aside from tourism, economic growth in the region has been fueled by businesses in the aviation, marine, and manufacturing industries taking advantage of the area’s tax incentives and workforce training.


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4. Charleston, W.Va. 

Charleston ranks fourth among small metro areas for homeownership.  West Virginia’s capital and largest city has the lowest median monthly homeowner costs in our top 10 at $992, and 74 percent of residents own their homes. Charleston is the business, financial, medical, government, retail and cultural center of the state, and its major employers include state and local government, Charleston Area Medical Center and Kanawha County schools. The Charleston Area Alliance is investing in a number of initiatives to promote economic expansion in the area under a plan called Vision 2030. Current projects include GROW, a program supporting local entrepreneurs, and Imagine Charleston, a downtown revitalization project.

5. Ocala, Fla.

The Ocala metro area is a popular place to buy real estate with the highest homeownership rate in our top 10. Its prime location in Central Florida provides residents easy access to nearby cities Jacksonville, Orlando and Tampa. Ocala’s strong health care system and abundance of outdoor recreational areas have made it a popular retirement destination. The area is known for its more than 700 horse farms, Silver Springs State Park, and Ocala National Forest, the second largest national forest in the state. The Ocala/Marion County Chamber and Economic Partnership (CEP) is driving economic growth by attracting businesses in logistics and advanced manufacturing to the area and supporting local entrepreneurs through the Power Plant Business Incubator.

Rank Metro area Home ownership rate Median selected monthly homeowner costs Median monthly household income Homeowner costs as a percentage of household income 2011-2012 Population Growth Overall score for home- owners
1 Huntsville, Ala. 70.9% $1,204 $4,534 26.6% 1.2% 73.0
2 Fort Wayne, Ind. 71.3% $1,007 $4,109 24.5% 0.8% 71.1
3 Myrtle Beach-North Myrtle Beach-Conway, S.C. 68.7% $1,242 $3,388 36.7% 2.2% 69.1
4 Charleston, W.Va 74.0% $992 $3,772 26.3% 0.3% 68.2
5 Ocala, Fla. 76.1% $1,141 $3,131 36.4% 0.8% 66.3
6 Naples-Marco Island, Fla. 73.9% $1,738 $4,449 39.1% 1.3% 65.9
7 Columbus, Ga.-Ala. 57.5% $1,216 $3,417 35.6% 3.1% 63.5
8 Springfield, Mo. 64.6% $1,043 $3,525 29.6% 1.4% 63.3
9 Fort Collins-Loveland, Colo. 65.2% $1,539 $4,690 32.8% 1.6% 62.8
10 Wilmington, N.C. 65.9% $1,417 $3,954 35.8% 1.6% 60.9

The Best Medium-Sized Metro Areas for Homeownership

1.  Des Moines-West Des Moines, Iowa

Des Moines-West Des Moines is the best mid-sized metro area for homeowners.  Iowa’s capital has a high homeownership rate at 71.5 percent, and its population increased by 1.8 percent from 2011 to 2012.  Des Moines’ low cost of living not only draws homeowners to the area, but also attracts many large employers in the financial services and technology industries. This year, Microsoft and Facebook announced multimillion-dollar investments to build data centers in the area. Des Moines is also home to Drake University, a top university in the Midwest and a catalyst for economic growth in the region.  Residents also benefit from a lively downtown and many cultural events in the area such as the Des Moines Arts Festival, the Iowa State Fair and the World Food & Music Festival.

2.  Ogden-Clearfield, Utah

One of the most affordable mid-sized metro areas on our list, Ogden-Clearfield is a great place to settle down and purchase a home. Since the monthly cost of being a homeowner here is only 27.6 percent of median household income, it is clear why nearly 75 percent of residents have purchased their homes. Ogden’s local economy is thriving as the development of the Business Depot Ogden, Utah’s largest business and industrial park, has attracted many employers to the area. The city has also partnered with Weber State University to support its startup community through the construction of Weber State Downtown. If you love the outdoors, then Ogden is the place for you. Nearby mountains Snowbasin and Powder Mountain are perfect for skiers looking to avoid the crowds, and adventure-seekers can kayak in the Ogden and Weber rivers.

3.  Provo-Orem, Utah

The second metro area on our list from the Beehive State is another attractive place for homeowners.  With a high homeownership rate at 67.8 percent and monthly homeownership costs at 30.6 percent of median household income, Provo-Orem is very homebuyer-friendly. The area has also grown faster than the other Utah metro areas on our lists with population growth of 1.6 percent. Provo is bordered by the mountain peaks of the Wasatch Front to the east and the Utah Lake to the west, giving residents plenty of access to outdoor recreational areas. The metro area is home to Utah’s largest universities – Brigham Young University and Utah Valley University – both of which have helped spur its economic growth. BYU’s Innovation Academy and the Innovation Center at Utah Valley University are supporting a highly educated workforce and the development of new businesses in the area. Provo-Orem’s residents are not only prospering, but they are also known to be very generous, leading the nation in volunteerism.

4.  Grand Rapids-Wyoming, Mich.

Grand Rapids-Wyoming is a great place for homeownership. 72 percent of residents own their home and are spending 30.1 percent of their monthly household income on homeowner costs.  Grand Rapids is located on the Grand River and is just a short drive to Lake Michigan.  The city has been nationally recognized as a great place to live with particular emphasis on its sustainability efforts, employment prospects and emerging downtown scene. Historically known as a furniture manufacturing center, its local economy is now diversified with large employers in the health care, consumer goods and technology industries. Named BeerCity USA for two years in a row, beer lovers will also enjoy sampling the area’s craft breweries.

5.  Columbia, S.C.

If you are in the market to buy a new home, Columbia is a great place to look.  The area has one of the lowest median monthly homeowner costs in our top 10 at $1,207 and its population has grown by 1.3 percent. Columbia is the capital of and the largest city in South Carolina.  The area has a diversified economy with major employers in the health care, advanced manufacturing and insurance information and technology sectors. Columbia’s economy also benefits from the presence of six major universities in the area, including the University of South Carolina, which provides local businesses access to talent, research, equipment and facilities. The city has invested in a number of development projects to revitalize downtown Columbia, including The Congaree Vista and Main Street, and have created a vibrant commercial and residential city center.

Rank Metro area Home ownership rate Median selected monthly homeowner costs Median monthly household income Homeowner costs as a percentage of household income 2011-2012 Population Growth Overall score for home- owners
1 Des Moines-West Des Moines, Iowa 71.5% $1,360 $4,921 27.6% 1.8% 89.2
2 Ogden-Clearfield, Utah 74.8% $1,421 $5,153 27.6% 1.2% 89.1
3 Provo-Orem, Utah 67.8% $1,493 $4,876 30.6% 1.6% 74.5
4 Grand Rapids-Wyoming, Mich. 72.0% $1,261 $4,191 30.1% 0.7% 73.2
5 Columbia, S.C. 67.6% $1,207 $3,963 30.5% 1.3% 70.5
6 Boise City-Nampa, Idaho 67.4% $1,284 $4,016 32.0% 1.4% 68.3
7 Palm Bay-Melbourne-Titusville, Fla. 73.8% $1,346 $3,958 34.0% 0.7% 67.1
8 Charleston-North Charleston-Summerville, S.C. 65.2% $1,492 $4,222 35.3% 2.2% 66.5
9 North Port-Bradenton-Sarasota, Fla. 72.6% $1,499 $3,942 38.0% 1.5% 65.2
10 Greenville-Mauldin-Easley, S.C. 67.4% $1,172 $3,758 31.2% 0.9% 65.2

The Best Large Metro Areas for Homeownership

1.  Raleigh-Cary, N.C.

The Raleigh-Cary metro area takes the top spot among large metro areas for homeownership.  As one of the fastest growing and most affordable areas on our list, the Triangle is a great place to purchase a home. Residents have access to top universities – Duke University, University of North Carolina and North Carolina State University – medical centers and Research Triangle Park, one of the largest research facilities in the world.  The supply of a highly educated workforce attracts companies like MetLife to the area, contributing to an already thriving economy and stimulating job growth. In addition to attracting employers, locals benefit from UNC and NC State’s outstanding community engagement, and college sports fans enjoy the heated rivalry between the Tar Heels and the Blue Devils. With its four distinct seasons and geographic location halfway between the mountains and the beach, the area offers lots of opportunity for recreational activities.

2.  Charlotte-Gastonia-Rock Hill, N.C.-S.C.

Charlotte-Gastonia-Rock Hill is the second metro area on our list from the Tar Heel state.  With median monthly homeowner costs representing 32 percent of household income and population growth of 2 percent, it is a very attractive area to purchase a home.  Though it is the nation’s second largest financial center, the area is also home to a wide range of Fortune 500 employers including Bank of America, Lowe’s, and Duke Energy.  The area is family friendly with a good public school system.  It delivers access to a number of universities including UNC Charlotte, recognized for producing more start-up businesses than any other college or university, and Davidson College, one of the nation’s premier liberal arts colleges.  Sports fans also have many options to choose from, including attending NASCAR races and cheering on the Panthers or the Bobcats.

 3.  Salt Lake City, Utah

If you are currently in the market for a home, Salt Lake City is a great place to consider.  The third Utah city on our list is very buyer friendly with affordable homeowner costs, strong population growth and one of the highest homeownership rates in our top 10. The capital city of Utah is surrounded by the Great Salt Lake and the Wasatch and Oquirrh mountain ranges, and locals are within minutes of some of the best ski slopes in the country – Alta, Brighton, Snowbird and Solitude. This mountain town has a vibrant cultural scene downtown and hosts portions of the Sundance Film Festival every year.  The area also boasts a thriving economy with a strong presence in high growth industries such as aerospace and information technologyThe Utah Science Technology and Research initiative at the University of Utah is supporting the growth of local businesses, and its focus on STEM subjects is attracting many employers to the area.

4.  Indianapolis-Carmel, Ind.

Indianapolis-Carmel is the most affordable big metro area on our list with homeowners spending just 29 percent of their income on homeowner expenditures.  Nearly two thirds of residents call themselves homeowners, and the population has grown by 1.2 percent.  Indianapolis’ economy is expanding rapidly, and 2013 was a record year for the city, which secured commitments from 261 companies to create 21,420 jobs over the next five years. Large employers headquartered here include Eli Lilly & Company, WellPoint and BrightPoint. Locals get a front row seat to the many sporting events and conventions the area hosts including the Indianapolis 500, NCAA tournaments and the Indy Jazz Fest. The city of Carmel has also been nationally recognized for being a great place to live and for its environmental and green initiatives.

5.  Nashville-Davidson–Murfreesboro–Franklin, Tenn.

The Nashville metropolitan area ranks fifth among large metro areas for homeowners with a population increase of 1.6 percent and affordable homeownership costs at just 32.1 percent of median monthly household income.  The Music City is known for its vibrant music and entertainment scene, home to 5,000 working musicians, 180 recording studios and events including the CMA Music Festival and the CMT Music Awards. Though the music industry has long been a driver of economic growth in Nashville, the health care industry remains the region’s largest and fastest growing employer with more than 250 health care companies directly employing 210,000 residents.  Nashville is also known as the “Athens of the South” due to the high concentration of colleges and universities in the area, including Vanderbilt University and Tennessee State University.

Rank Metro area Home ownership rate Median selected monthly homeowner costs Median monthly household income Homeowner costs as a percentage of household income 2011-2012 Population Growth Overall score for home- owners
1 Raleigh-Cary, N.C. 66.8% $1,482 $5,028 29.5% 2.2% 88.1
2 Charlotte-Gastonia-Rock Hill, N.C.-S.C. 65.9% $1,394 $4,362 32.0% 2.0% 81.8
3 Salt Lake City, Utah 67.5% $1,527 $4,970 30.7% 1.4% 80.9
4 Indianapolis-Carmel, Ind. 66.2% $1,248 $4,302 29.0% 1.2% 79.6
5 Nashville-Davidson–Murfreesboro–Franklin, Tenn. 65.8% $1,367 $4,265 32.1% 1.6% 77.9
6 San Antonio-New Braunfels, Texas 62.9% $1,337 $4,257 31.4% 1.7% 75.6
7 Jacksonville, Fla. 66.7% $1,472 $4,246 34.7% 1.4% 74.6
8 Louisville/Jefferson County, Ky.-Ind. 67.9% $1,206 $3,997 30.2% 0.4% 74.3
9 Birmingham-Hoover, Ala. 70.1% $1,264 $3,888 32.5% 0.4% 74.2
10 Denver-Aurora-Broomfield, Colo. 63.4% $1,690 $5,116 33.0% 1.7% 74.1

The overall score for each city was derived from each of these measures:

1. Homeownership rate: U.S. Census (2010-2012 ACS)
2. Selected monthly owner costs: U.S. Census (2010-2012 ACS)
3. Median monthly household income: U.S. Census (2010-2012 ACS)
4. Population change from 2011 to 2012: U.S. Census (2012 ACS)
The largest 100 metro areas in the United States were included in this analysis.

Creative Commons: Image: Images_of_Money /Flickr: Source