Are you a millennial or Generation Xer on a budget hoping to buy your first home? Then steer clear of Honolulu and most of California, and head for the Midwest.
That’s right. Bloomberg News ranked the 100 largest metros to figure out the least and most affordable places for those between ages 25 and 44 to become homeowners.
It turns out, the minimum salary required to make the monthly mortgage payments in six of those metros (Honolulu; Silicon Valley’s San Jose, CA; Los Angeles; San Francisco; San Diego; and coastal Oxnard, CA) is higher than the income typical first-time buyers earn. No big surprises there.
But those dreaming of owning their own homes shouldn’t lose hope.
Bloomberg also listed the most affordable cities for first-time home buyers, with Des Moines, IA, topping the rankings.
The estimated monthly mortgage payment is just $613 in Iowa’s capital, meaning residents would need to bring home only a little more than $22,000 to afford a home, according to the publication. However, the area’s median income is about $72,200—leaving plenty left over for all those other pesky bills. (The median listing price in Des Moines is $125,000, according to �.)
But just like in the rest of the country, prices are going straight up, to the highest levels that local real estate agent Bryan Curtis has ever seen. That’s because there just aren’t enough homes available for sale.
This isn’t keeping a fresh crop of buyers away, though, as more people are continuing to move into the region, he says.
“It is [still] somewhat affordable,” says Curtis, of Keller Williams Realty in West Des Moines. “Even if you overpay for a house, it’s still a good deal with the [low] mortgage interest rates.”
He attributes the influx of new residents to the area’s low unemployment—just 3.2% in May, according to the U.S. Bureau of Labor Statistics. That’s due to some major employers such as the Principal Financial Group, which is headquartered there, as well as firms with big local outposts, including Wells Fargo, Nationwide, and human resources consulting company Mercer, according to the Greater Des Moines Partnership.
After Des Moines, the next most affordable meccas for home buyers were in the Rust Belt metros of Pittsburgh and Baltimore. The median listing prices for both cities was $165,000, according to realtor.com.
Rounding out the top six were Minneapolis, where median prices in the city were $250,000; Kansas City, MO, at $150,000; and Omaha, NE, at $185,000.