Finding the Most Affordable Places to Buy a Home

At Square One Planning, we pride ourselves on providing accurate and insightful data to help you make informed decisions. Our methodology for identifying the most affordable places to buy a home involves a comprehensive analysis of various financial factors across the United States.

Data Collection and Analysis

1. Initial Selection:

   • We began our analysis by considering all cities with a population of 5,000 or greater.

2. Cost Factors:

   • We analyzed critical cost components, including:
     • Closing Costs: Fees required to complete the transaction.
     • Real Estate Taxes: Annual taxes levied on property.
     • Homeowners Insurance: Insurance policies to protect against damages.
     • Mortgage Rates: Interest rates on home loans.

3. Total Cost Calculation:

   • We calculated the total cost of owning a home by using the average home cost in each city over a five-year period. This calculation included all the aforementioned cost factors.

4. Affordability Measurement:

   • To determine affordability, we measured the five-year total cost as a proportion of the median household income in each city. This approach allowed us to see how significant housing expenses were relative to what an average household earns in those areas.

5. Indexing for Comparison:

   • Each city was indexed on a scale from 0 to 100. The most affordable location received a score of 100, making it easy to compare affordability across different cities.

Results Interpretation

The cities where the total housing costs were the smallest compared to the median income were deemed the most affordable. This indexed approach ensures a fair comparison and highlights areas where homeownership is financially more accessible.

By following this rigorous methodology, Square One Planning helps you identify the best places to invest in a home, ensuring that your financial decisions are grounded in solid data.