Mortgage Rates Are Dropping: 20 Housing Markets With the Most Affordable Home Prices

Mortgage rates have eased slightly in recent weeks after spending much of 2024 trending higher. The average rate for a 30-year fixed-rate mortgage was 6.95% as of July 3, according to Freddie Mac. That’s well down from a high of 7.79% in October 2023 and below the 52-week average. Rates for a 15-year fixed mortgage are also below the 52-week average.

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This trend bodes well for house hunters, who haven’t had much to cheer about lately. The median existing-home price for all types of U.S. housing hit $419,300 in May, according to the National Association of Realtors. That was the highest median price ever recorded and represented an increase of 5.8% from the previous year. All four U.S. regions registered price gains.

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A separate report released earlier this week by ATTOM Data Solutions determined that home affordability in the United States is at its lowest point since 2007, based on mortgage, tax and insurance costs. Those costs currently suck up 35.1% of the average homeowner’s take-home pay — well above the common lending guideline of 28%.

“The latest affordability data presents a clear challenge for home buyers,” ATTOM CEO Rob Barber said in a news release. “While home prices are increasing and mortgage rates remain relatively high, these factors are making homes less affordable. It’s common for these trends to intensify during the spring buying season when buyer demand increases. However, the trends this year are particularly challenging for house hunters, more so than at any point since the housing market boom began in 2012.”

But there could be good news on the horizon, thanks to lower mortgage rates and a rise in the number of homes on the market.

“Eventually, more inventory will help boost home sales and tame home price gains in the upcoming months,” NAR Chief Economist Lawrence Yun said in a statement. “Increased housing supply spells good news for consumers who want to see more properties before making purchasing decisions.”

It’s especially good news for consumers who live in or near big cities that haven’t experienced a massive surge in home values. Using recent data from Realtor.com , GOBankingRates found 20 cities with median home prices well below the national median.

Here are are the housing markets with affordable home prices.

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Baltimore, Maryland

• Median listing home price : $224,900
• Price per square foot : $165

Buffalo, New York

• Median listing home price : $215,000
• Price per square foot : $156

Cleveland, Ohio

• Median listing home price : $135,000
• Price per square foot : $102

Des Moines, Iowa

• Median listing home price : $240,000
• Price per square foot : $206

Detroit, Michigan

• Median listing home price : $93,300
• Price per square foot : $82

Fort Worth, Texas

• Median listing home price : $360,000
• Price per square foot : $187

Indianapolis, Indiana

• Median listing home price : $275,000
• Price per square foot : $149

Jacksonville, Florida

• Median listing home price : $319,900
• Price per square foot : $194

Kansas City, Missouri

• Median listing home price : $275,000
• Price per square foot : $166

Louisville, Kentucky

• Median listing home price : $285,000
• Price per square foot : $163

Memphis, Tennessee

• Median listing home price : $230,000
• Price per square foot : $140

Montgomery, Alabama

• Median listing home price : $215,000
• Price per square foot : $110

Milwaukee, Wisconsin

• Median listing home price : $199,900
• Price per square foot : $155

Oklahoma City, Oklahoma

• Median listing home price : $300,000
• Price per square foot : $168

Omaha, Nebraska

• Median listing home price : $344,500
• Price per square foot : $173

Rochester, New York

• Median listing home price : $159,900
• Price per square foot : $117

St. Louis, Missouri

• Median listing home price : $209,900
• Price per square foot : $151

St. Paul, Minnesota

• Median listing home price : $300,000
• Price per square foot : $212

Toledo, Ohio

• Median listing home price : $125,000
• Price per square foot : $99

Wichita, Kansas

• Median listing home price : $300,000
• Price per square foot : $139

This article originally appeared on GOBankingRates.com : Mortgage Rates Are Dropping: 20 Housing Markets With the Most Affordable Home Prices