Why Atlanta Housing Is So Affordable

Houses in Atlanta, which is often referred to as ATL, A-Town or the Big Peach, have long been known as some of the most affordable in the nation, and several factors have made it even more affordable in recent years.

According to one of the largest and most trusted mortgage resources online, HSH.com, the average house in the metro area sells for $142,400, and most qualified buyers may negotiate monthly mortgage payments to as little as $569. This not only makes a home in the area affordable as a primary residence but also as an investment.

Most Affordable Housing in the U.S.

Affordable Housing Atlanta MapIn February 2014, HSH.com ranked the cities with the most affordable houses in the nation, and ATL was listed as number four. With a median home price of just more than $142,000, a person would only need to have a minimum annual income of $24,391 to comfortably afford the $569 mortgage payment. The fourth-quarter mortgage rate for the city was 4.38 percent, which was down by 0.25 percent from the previous quarter.

To complete the ranking, HSH.com used information on fourth-quarter median home prices from the National Association of Realtors and the average interest rate for 30-year, fixed-interest mortgages during the same period. Furthermore, the mortgage resource used a standard 28 percent debt ratio with a 20 percent down payment to calculate the average monthly loan payments and the minimum salary requirements. Taxes, insurance and other living expense were not included, however, which means that most people will need to have slightly higher incomes than those listed.

HSH.com states that home prices have seen a lot of improvement in the city, but the fourth quarter of 2013 has not been as great as the previous three across the country. However, the mortgage website continues by saying, “Current homebuyers aren’t complaining. With the largest quarterly rate spread of any metro area on the list so far, buyers can earn $2,472 less than they earned last quarter and still afford the principal and interest payments on median-priced homes.”

The fourth quarter of 2013 was a great time to buy USA real estate in several cities in the nation, and it appears that the trend will continue into 2014. The complete list of cities with the most affordable houses and the minimum annual salaries to purchase homes is as follows:

1. Cleveland – salary $19,435.17
2. Cincinnati – salary $22,226.95
3. St. Louis – salary $22,397.54
4. Atlanta – salary $24,390.94
5. Tampa – salary $24,650.88
6. Orlando – salary $28,298.47
7. San Antonio – salary $29,305.47
8. Dallas – salary $29,751.24
9. Houston – salary $31,298.99
10. Chicago – salary $32,388.90
11. Phoenix – salary $32,811.94
12. Minneapolis – salary $33,800.09
13. Philadelphia – salary $36,836.47
14. Baltimore – salary $41,155.40
15. Sacramento – salary $42,832.20
16. Miami – salary $43,918.66
17. Portland, Ore. – salary $45,872.78
18. Denver – salary $48,122.72
19. Seattle – salary $59,129.86
20. Washington, D.C. – salary $62,809.63
21. Boston – salary $63,673.13
22. New York City – salary $66,167.27
23. Los Angeles – salary $72,126.90
24. San Diego – salary $81,570.40
25. San Francisco – salary $115,510.06

Reasons for Affordable Real Estate in Atlanta

The Big Peach has been named in several other rankings of the most affordable cities in the U.S. for homebuyers. In 2012, Interest.com, a subsidiary of Bankrate, listed ATL as the second most-affordable market in the nation. At that time, the median home price was only $103,200, and 40 percent of households earned enough money to afford median-priced homes.

One of the major reasons for the affordability of homes in the city is that prices dropped during the Great Recession more than in other cities, and it is taking longer for the market to recover. In fact, the median price of homes in 2012 was lower than it was 12 years earlier in 2000. Detroit and Minneapolis also ranked in the top three cities, but prices have risen in the last two years to push them further down list.

Another article from CNN Money ranked ATL as the most affordable city in the U.S. for homebuyers based on a report from Deutsche Bank. This report also states that when the housing bubble burst, the crash in the market was much worse than it was in other locations. In addition, the metro area ranked number one for new home construction for the decade before the recession, so there was an abundance of real estate in the market, especially in the southern suburbs and near the Hartsfield-Jackson International Airport.

The article also states that buying is about 50 percent more affordable than renting even after figuring in tax payments. This makes an investment in area homes a real no-brainer.

Author: Julian Sutherland

Julian Sutherland is an International real estate agent based on the Gold Coast, Queensland, Australia, servicing the Asia Pacific Region.

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