If your real estate strategy relies on middle-class buyers being able to afford your properties, then you might want to take a closer look at these metro areas.

As the housing affordability crisis looms as the next big issue for our national housing market, an increasing number of would-be homebuyers are finding themselves unable to afford the cost of owning their own homes. While many simply opt to rent instead, those who insist on homeownership may have to look farther afield if they want to live in a major metropolitan area and also qualify for a mortgage. According to a recent survey from Realtor.com, only five of the country’s 100 largest metro areas offer access to inventory affordable to these middle-class earners. “Middle class” was defined as a household earning between $42,000 and $125,000 annually, as specified by the Pew Research Center, and the evaluative process was based on the assumption that the borrower would take out a 30-year fixed-rate mortgage with a 20% down payment. Realtor.com reporter Lance Lambert noted, “most [middle-class Americans] hew closer to the $59,000 median” for annual household income.

Here are the top five major metro areas for middle-class earners:

  1. Provo, Utah
  2. Des Moines, Iowa
  3. Austin, Texas
  4. Raleigh, North Carolina
  5. El Paso, Texas

All five of these markets’ inventories were at least 69% available to middle-class earners, assuming they were able to make a 20% down payment when they purchased their home. That is a big assumption since more than half of all buyers (54%) put less down on their homes. However, for a real estate investor with a knack for creative financing, these reliable, solid buyers could be a perfect niche market since most would rather own than rent, given the opportunity.

Do you think it’s important to be accessible to middle-class homebuyers? Tell us why or why not here.

  • Carole VanSickle Ellis

    Carole VanSickle Ellis serves as the news editor and COO of Self-Directed Investor (SDI) Society, a membership organization dedicated to the needs of self-directed investors interested in alternative investment vehicles, including real estate. Learn more at SelfDirected.org or reach Carole directly by emailing Carole@selfdirected.org.

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