The Great Big List of U.S. cities where you can’t afford to start a family (and dozens of cities where you can!)

From this Trulia blog
From this Trulia blog

(If you are here just to see the Big List of affordable and unaffordable cities to start a family, scroll to the bottom).

Requiem for the Stater Home” was one of the most important stories I’ve written as part of The Restless Project, I believe.  In it, I explain that developers only want to build expensive housing or subsidized housing. At the same time, older homes are disappearing from the market via disrepair or conversion to rentals. As a result, the supply of homes available to families just starting out — starter homes — has shrunk dramatically.

First off, that leaves young families with a couple of kids stranded in two-bedroom apartments across America. But even if you don’t have children, this impacts you, too — it disrupts the entire food chain of the housing market. Without first-time buyers, homeowners can’t trade up to bigger places, and retiring couples can’t sell and downsize.

I based my story on interviews with both developers and buyers.

Now, there’s data to  prove me right.  Look at this great story on Credit.com by my colleague and friend Constance Brinkley-Badgett, based on data from Trulia.com.  The firm studied the stater home market and found that the number of available starter homes dropped by 43.6% in the past four years.

Here’s some other factoids that should bring tears to your eyes.

  • Across the 100 largest metros, 95 have shown a decrease in the number of starter homes over the past four years
  • Nine of the 10 metros experiencing the largest drop in starter home affordability – which is affected by both the number of listings and home-buying demand – are located in the California. Starter homebuyers in Oakland, Calif., would have to spend nearly 70% of their income to afford a 30-year fixed-rate mortgage on a starter home, which is 29% more of their income than in 2012.”
  • (And, worset of all) — Now, starter homebuyers would need to dedicate 37.7% of their income – a 5.6 percentage point increase (from 2012) to buy a starter home

Small families, starting out, getting squeezed even more.  If you wonder why your friend with a new baby isn’t house shopping, that’s why.  It now takes almost 40 percent of a paycheck to buy the most modest homes in many American cities. Remember, housing is considered expensive if it eats up more than one-third of income.

While this is true in plenty of cities where you’d expect the worst — like San Francisco or San Diego — it’s also true in places like Tacoma, Wash., New Haven, CT and even Providence, R.I.  In fact, if you subscribe to idea of that 33 percent cutoff, starter homes are unaffordable in 31 of the top 100 markets, according to Trulia.  And if you extend the number down to 28% of income, a more traditional dividing line, 51 of 100 markets are unaffordable to new buyers looking for a humble home.  See the Great Big List below.

There is, however, a silver lining in this data.  Another way to frame that last sentence is: Almost precisely half of U.S. markets are affordable for newcomers.  You just have to know where they are.  So in the Great Big List below, I turned the data upside down and ranked the affordable cities. The most affordable places are also depicted in the map above.

I’ve already written about life in some of these cities in my “Promised Land” series — Kansas City, Buffalo, Cincinnati, Pittsburgh.  But the list below is an even more comprehensive look at places where young people should consider moving to find affordable lives.  Do you live in any of these cities? I’d love to hear from you.

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About Bob Sullivan 1371 Articles
BOB SULLIVAN is a veteran journalist and the author of four books, including the 2008 New York Times Best-Seller, Gotcha Capitalism, and the 2010 New York Times Best Seller, Stop Getting Ripped Off! His latest, The Plateau Effect, was published in 2013, and as a paperback, called Getting Unstuck in 2014. He has won the Society of Professional Journalists prestigious Public Service award, a Peabody award, and The Consumer Federation of America Betty Furness award, and been given Consumer Action’s Consumer Excellence Award.

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