Where is it getting easier to buy a home?

One of the biggest issues for relocation is the ability for employees to sell their current home and buy a new one. Overall cost of living is a big challenge too, but the specific costs associated with housing have caused employees to be shackled in place by “golden handcuffs”. While the recent federal rate cut seemed to be good news, we are still short of the “magic mortgage rate” (under 5,5%) that some believe would truly open up the housing market.  

But recent news suggests that some housing markets are starting to become more affordable. Recently, Forbes Advisor compared the 100 largest U.S. cities with available data across key metrics, including affordability, inventory and lifestyle, to determine the best cities in which to buy an affordable home. Here's what they found:

10 Best Cities To Buy An Affordable Home:

1. Pittsburgh, PA
2. Fort Wayne, IN
3. Buffalo, NY
4. Huntsville, AL
5. Oklahoma City, OK
6. Indianapolis, IN
7. El Paso, TX
8. Lexington, KY
9. Louisville, KY
10. Omaha, NE

On the other hand, their bottom 10 are the cities that ranked as the least affordable:

1. Oakland, CA
2. San Francisco, CA 
3. San Bernardino, CA
4. Riverside, CA
5. Anaheim, CA
6. San Jose, CA
7. Los Angeles, CA
8. Seattle, WA
9. Stockton, CA
10. Tacoma, WA

Not a big surprise. The Midwest is more affordable and the West Coast is not! Much of the above gets reiterated and expanded upon in this related article from U.S. News and World Report, “The 25 Best Affordable Places to Live in the U.S. in 2024-2025”. When it comes to housing costs, these cities allow your paycheck to go further. They looked at the proportion of the median annual household income that goes toward the average cost to own or rent a home, including the typical cost of utilities and taxes, as well as price parity, which compares the cost of goods and services across the country. 

Realtor.com shares some additional data on locations where home prices are becoming more affordable. Keep in mind though this data predates the recent storms in the Southeastern U.S., so trends might change as areas are rebuilt and repaired. Also note that San Francisco, while sitting as the second least affordable place on the list above, is seeing prices drop! Here is the list of the top 10 locations where prices are coming down:

1. Miami, -12.4% year over year
2. Cincinnati, -9.5% year over year
3. San Francisco, -8.9% year over year
4. Kansas City, -8.4% year over year
5. Austin, -6.6% year over year
6. Jacksonville, -6.1% year over year
7. Denver, -6% year over year
8. Orlando, -5.6% year over year
9. Tampa, -5.5% year over year
10. Nashville, -5.4% year over year

Why should you care? Well, if your mobility team handles U.S. domestic relocations, you'll want to track housing affordability for the following reasons: 

1. Cost Management: Understanding the affordability (and unaffordability) of different cities helps your team manage relocation budgets more effectively. It also helps you be realistic about costs when you're working with stakeholders. Sometimes, by identifying lower-cost areas, you can offer more competitive relocation packages while minimizing expenses for the company. For those in higher cost locations, monitoring affordability helps to provide accurate information and better assess your benefits for each location.
2. Employee Satisfaction: Relocating employees are often concerned about their cost of living in a new city. By providing options in more affordable areas, your team can boost employee satisfaction and ease the transition, leading to a smoother relocation experience. You'll also want to know how your location compares to others the employee may be considering!
3. Attracting Talent: In a competitive job market, offering relocation to more affordable cities can be an attractive incentive for potential hires. It can help the company attract top talent by presenting opportunities that allow employees to maximize their quality of life. As an example, knowing that prices are plummeting in your city may be helpful in selling the overall proposition for that employee to move there. 
4. Retention Rates: When employees relocate to cities with a lower cost of living, they may experience less financial stress. This can lead to higher retention rates, as employees are more likely to stay with the company if they feel financially secure and satisfied with their living conditions. 
5. Market Trends: Monitoring affordability trends can provide insights into broader economic conditions and market dynamics. This information can help your team make informed decisions about future relocations and workforce planning. 
6. Customized Support: Knowing which cities are more affordable allows your mobility team to tailor support services and consider unique benefits that could make or break hiring of an key employee. You can provide targeted resources, such as housing assistance and local community information, that align with the specific needs of employees relocating to those areas.
7. Mitigating Risks: Relocating to high-cost areas can lead to financial strain for employees, potentially resulting in dissatisfaction or even turnover. By focusing on more affordable locations, your team can help mitigate these risks.

In summary, being informed about the affordability of different cities often empower the global mobility team to make strategic decisions that benefit both the company and its employees, ultimately leading to a more effective and supportive relocation process.