October 8, 2018

Affordability: Top 10 fastest growing metros

Raise your hand if you know someone who recently moved to Atlanta, Dallas-Fort Worth or Houston.

A lot of hands went up, because those are the three fastest-growing metropolitan areas in the U.S. — and they have relatively affordable home prices.

NerdWallet calculated home affordability for the 10 metro areas that had the most population growth from mid-2016 to mid-2017, the latest data available from the U.S. Census Bureau. Among them, Atlanta had the most affordable home prices this spring and Seattle had the least affordable.

Affordability was estimated by comparing each metro area's median household income with the monthly principal-and-interest payment for a median-priced single-family home in the second quarter. After a 20 percent down payment, house payments were calculated at an interest rate of 4.71 percent, the average rate for a 30-year fixed-rate mortgage in the second quarter in NerdWallet's daily mortgage rates survey.

The three most affordable metros for buying a home have two things in common, says Danielle Hale, chief economist for Realtor.com: space to grow and local governments that “are more willing to permit and allow development, too.”

The rankings were compiled using data from the National Association of Realtors, the Census Bureau and NerdWallet.

FASTEST-GROWING METROS BY HOUSING AFFORDABILITY

1. ATLANTA-SANDY SPRINGS

ROSWELL, GEORGIA

Median home price: $228,800

Median household income: $62,613

Principal and interest payment: $950 (equivalent to 18.2 percent of median monthly income)

Population growth: 89,013

Atlanta had the lowest median house price among the 10 fastest-growing metro areas and the fifth-highest household income. The combination of wages and house prices put Atlanta at the top for house affordability.

2. HOUSTON-THE WOODLANDS-

SUGAR LAND, TEXAS

Median home price: $244,400

Median household income: $61,708

Principal and interest payment: $1,015 (19.7 percent of monthly income)

Population growth: 94,417

Houston's affordability comes courtesy of having this list's third-lowest house prices and sixth-highest household income.

3. DALLAS-FORT WORTH-

ARLINGTON, TEXAS

Median home price: $268,200

Median household income: $63,812

Principal and interest payment: $1,114 (21 percent of monthly income)

Population growth: 146,238

The Metroplex had the fourth-highest income on the list and the fourth-lowest house prices, making it third most affordable. It was the fastest-growing metro.

4. WASHINGTON, D.C.,

METRO AREA

Median home price: $443,100

Median household income: $95,843

Principal and interest payment: $1,841 (23 percent of monthly income)

Population growth: 65,908

The Washington-Arlington-Alexandria metro area sprawls across the District of Columbia and parts of Virginia, Maryland and West Virginia. Prices were second-highest among these 10 metros and incomes were highest.

5. AUSTIN-ROUND ROCK, TEXAS

Median home price: $330,200

Median household income: $71,000

Principal and interest payment: $1,372 (23.2 percent of monthly income)

Population growth: 55,269

The Texas capital had the fourth-highest house prices among the fastest-growing metro areas and third-highest household income.

6. TAMPA-ST. PETERSBURG

CLEARWATER, FLORIDA

Median home price: $238,700

Median household income: $51,115

Principal and interest payment: $992 (23.3 percent of monthly income)

Population growth: 54,874

Tampa-St. Pete had the second-lowest house prices on this list. But affordability took a hit because it had the lowest household income.

7. PHOENIX-MESA-

SCOTTSDALE, ARIZONA

Median home price: $272,000

Median household income: $58,075

Principal and interest payment: $1,130 (23.3 percent of monthly income)

Population growth: 88,772

Phoenix had the third-lowest household income on this list, along with the fifth-highest home prices.

8. ORLANDO-KISSIMMEE-

SANFORD, FLORIDA

Median home price: $269,000

Median household income: $52,385

Principal and interest payment: $1,117 (25.6 percent of monthly income)

Population growth: 56,498

This tourist magnet had the second-lowest incomes on this list, trailing only Tampa-St. Pete. But house prices were higher, striking a blow to affordability.

9. RIVERSIDE-ONTARIO-

SAN BERNARDINO, CALIFORNIA

Median home price: $360,000

Median household income: $58,236

Principal and interest payment: $1,495 (30.8 percent of monthly income)

Population growth: 57,017

With the third-highest house prices among the top 10, but the fourth-lowest household income, many residents of the Inland Empire have to stretch to afford a home.

10. SEATTLE-TACOMA-BELLEVUE

Median home price: $530,300

Median household income: $78,612

Principal and interest payment: $2,203 (33.6 percent of monthly income)

Population growth: 64,386

The Emerald City had the second-highest household income among the top 10 and the highest house prices. With a typical house costing more than half a million dollars, it's difficult to afford a house payment even on Seattle's relatively high incomes.

This article was provided to The Associated Press by the personal finance website NerdWallet. Holden Lewis is a writer at NerdWallet. Email: hlewis@nerdwallet.com. Twitter: @HoldenL.