Analysis of the Current Best Places to Buy a House

According to the most recent estimations, around 100 million of these homes are single-family homes. They account for about 90% of all the housing units in the USA.

Furthermore, the data reveals that another roughly 40 million homes are placed within 5.2 million multi-family residential buildings of all types, from duplexes to large high-rises.

The largest percentage, or 7.6%, of residential buildings are small buildings with 2-4 units.

Historical data reveals that from the earliest point of reference, 1982, until 2023, the US housing inventory averaged 2.27 million homes for sale. This indicates how low the current housing supply is, further narrowing the options in the best places to buy a house right now.

The all-time high of available homes for sale in the US housing inventory was just before the great recession, in July 2007, when there were 4.04 million homes for sale in the US.

Although the current supply is undoubtedly low, it is not the lowest of all time. The US housing inventory reached its all-time low in January 2022, when there were only 860,000 homes available for sale in the US.

The above stat illustrates that close to two-thirds of Americans live in homes where one of the residents is also the owner of that house. The remaining 34.5% of the US population resides in renter-occupied housing units.

By state, Washington DC has the lowest homeownership rate of 41.50%, potentially placing it among the best places to buy a house or a condo for renting. New York ranks second with 54.40%, followed by California, with 55.50%, Nevada, with 57.80%, and Hawaii, with a 61.00% rate.

On the other hand, the state with the highest homeownership rate in the US is West Virginia, where 73.90% of the population lives in housing units occupied by their owner. The remaining four states in the top five include Maine, with 73.40%, Minnesota, with 72.30%, Michigan, with 72.20%, and Vermont, with 72.10%.

The data on the top 75 largest metropolitan statistical areas in the USA reveals that homeownership rates in large cities are generally lower. As a matter of fact, all but four MSAs out of the 75 have a lower than the nationwide homeownership rate of 65.5%.

Interestingly, three of the top five MSAs with the highest homeownership rates on this list are MSAs in Arizona. Chesapeake, VA, is just below Gilbert, with a rate of 72.66%, followed by Santa Clarita, CA, with 70.34%, Scottsdale, AZ, with 66.58%, and Chandler, AZ, with 65.03%.

Arizona also tops the list of the best places to buy land and build a house in the USA by affordability. Namely, the median price per acre in Arizona is $4,164, and it is the cheapest countrywide. In contrast, the median price per acre in Rhode Island is the most expensive, and it is $350,374.

Conversely, Newark, NJ, has the lowest homeownership rate of 23.21%, among the 75 largest MSAs in the US, followed by Jersey City, which is also in NJ. The remaining three in the bottom five are Miami, FL, with 30.02%, New York, NY, with 33.16%, and Boston, MA, with 34.78%.

According to the data from Redfin, the above figure is 2% higher than what the median home price in the USA was in September 2022, although there are about 300,000 fewer houses on the market.

Furthermore, homes were the most expensive in California, where the median price was $787,000, followed by Hawaii, with a median price of $750,000. Just below these two was Massachusetts, where the median home price was $601,000.

The District of Columbia and Washington round up the top five states where houses are the most expensive, with median home prices of $626,000, and $602,000, respectively.

On the other end of the spectrum are the best places to buy a house for $300,000 or less. Iowa leads the list where the median home price was lowest nationwide, at $229,000. Ohio and Oklahoma were tied for second place, and the median home price in both states was $235,000.

The last two remaining countries among the bottom five were Louisiana, with a median home price of $243,000, and Arkansas, where the median home price was $256,000.

The median home price at the time of writing is 3.4% more expensive than it was a year ago.

Furthermore, the median sale price of a single family home in the USA is currently $430,399, or 3.4% more expensive than last year. The median sale price of a townhouse is lower than the one of a single family home at $371,178, but it is still 4.9% higher than what it was a year ago.

Finally, condos and co-ops are the least expensive, with a median sale price of $343,963, but their price experienced the largest increase of 5% compared to their median price of last year.

Data reveals that the Austin-Round Rock-Georgetown metro area in Texas experienced the largest cumulative growth in home prices in the USA in the last 25 years. If you are looking for the best places to buy a house where the value will rise, investing in this area is the safest bet you can place.

Second on the list is Boulder, CO, where the average home price increased by 256.48% between 1998 and 2022. Interestingly, the area with the third largest cumulative growth of 255.50% is Midland, also in Texas, while the area with fourth largest cumulative growth of 224.17% is Fort Collins, which is also in Colorado.

Kennewick-Richland, WA, rounds up the top five metro areas with the highest cumulative growth in home prices, with 211.07% in the last 25 years.

According to the latest analysis, rentals in Indian River County, FL, have the highest potential annual gross rental yields in the USA, making the county one of the best places to buy a house to rent out in the USA.

Going with the same metric, single family rentals in Collier County, also in Florida, have the second-largest potential annual gross rental yields of 14.7%. The county with the third-largest potential annual gross rental yields for single family rentals is Wayne County, MI, with 13%, followed by Mercer County, NJ, with 12.7%

The final area among the top five counties with the highest potential annual gross rental yields in the USA is also in Florida, and it is Charlotte County, where single family rentals can potentially gross 12% rental yields on an annual basis.

A recent study highlighted Green Bay, Wisconsin, as the most affordable city in the USA, and as such it is undoubtedly one of the best places to buy a house and live cheaply in the country.

The cost of living in Green Bay is among the lowest in the USA, with groceries being 15% less expensive than the national average, while transportation costs are 10.7% more affordable. Furthermore, the median price at which single family homes are sold in Green Bay is $223,500, or 92.57%, less expensive than the national median.

The median sale price of a condo or a co-op in Green Bay is $230,000, which is 49.55% less expensive than the national average, making it an affordable option for those looking to move into a condo as well.

Buying a beach house can be a great real estate investment, and the capitalization rate is one of the most important metrics to consider when evaluating the potential return. That said, Lake Anna, Virginia, is undoubtedly one of the best places to buy a beach house in the USA.

The data from a recent report highlights the cap rate of beach houses in Lake Anna as the highest in the country, at 12.1%, while the median home sale price of houses near the reservoir is quite affordable, at $385,000.

Other areas where you can find such opportunities include Hatteras Island, NC, where the cap rate is 9.5%, and the median home sale price is $412,500, and Navarre, FL, where the cap rate is 8.1%, and the median home sale price is $370,000.

Burdett, NY, is truly a hidden gem and, without doubt, one of the best places to buy a house for Airbnb in the USA. Beyond its great potential for short-term rental yields, rentals in the city have a relatively high average monthly occupancy rate, at 55.9%, and the median home price in Burdett is below the nationwide average, at $244,060.

Furthermore, Williamstown, KY, also presents a great opportunity for Airbnb profits, as short-term rentals in the city have a huge occupancy rate of 69.3%. What’s more, the median home price in Williamstown is quite low, at $179,403, while the annual revenue for short-term rental owners is $56,185.

Finally, short-term rentals in Fairbanks, AL, also have a great occupancy rate of 65.3%, and average annual revenue of $49,389. The median home price in this city is $147,597.

Compared to their potential yields in 2022, the potential annual gross rental yields of single family rentals have increased in 192 out of 212 counties in the USA in 2023, according to a recent study.

However, the potential yields of single family rentals in Orange County, CA, experienced the biggest growth of all the studied counties, making the area one of the best places to buy a house for investment in the USA.

The potential yields of properties in San Mateo County, CA, experienced the second-largest growth of 41.6%, while the potential yield of homes in Suffolk County, MA, grew by 41.2%. The potential yields of properties in New Castle County, DE, and Francisco County, CA, also experienced noteworthy growths of 40.5%, and 38.1%, respectively.

If you are looking for the best places to buy a house to get bang for your buck, the Motor City is definitely worth considering. Besides the inexpensive listings, Detroit has low median real estate taxes of $1,268, and a low average state income tax of 4.25%.

Additionally, Cleveland, OH, is another worthy contender in this category. The median home listing price in Cleveland is even lower than Detroit’s at $248,480, and has an even lower average state income tax, at 3.84%. Only the median annual real estate taxes are slightly higher, at $1,508.

Finally, Memphis, TN, can be a great choice. While the median home listing price, and annual real estate taxes in Memphis are slightly higher, at $327,275, and $1,658, respectively, it has an incredibly low average state income tax of only 1%.

Montgomery is also on the list of the best places to buy a house by Forbes, as the median home listing price in the city for 2023 is $299,224. Moreover, Alabama’s capital has a relatively inexpensive average state income tax of 3.67%.

For those who can go slightly above budget, Baltimore, MD, is also a great choice. The median home listing price in Charm City in 2023 is $365,875, however, its median annual real estate taxes and average state income tax are slightly higher, at $2,799, and 4.41%.

Alternatively, if you are on a lower budget, consider buying a house in Milwaukee, WI. Its median home listing price for 2023 is $239,900. However, its median annual real estate taxes and average state income tax are not that affordable, at $3,122 and 5.78%.

Toledo, Ohio, is one of the best affordable places to buy a new house in America. In addition to relatively cheap listings, taxes in Toledo are also inexpensive, with the median annual real estate taxes at $1,541 and the average state income tax at 3.84%.

Last but not least, two of the best and most affordable cities to buy a home in the US are both cities in New York, and they are Rochester and Buffalo. The median home listing is slightly lower in Rochester at $274,338, while in Buffalo, it is $277,697.

On the other hand, Buffalo has a lower median real estate tax, at $1,601, while in Rochester, they are $2,625. Since the two cities are in the same state, they have the same average state income tax of 6%.