It’s easiest to pay off a mortgage in these 10 cities, new report finds
(NEXSTAR) — While a mortgage is widely considered a “good debt” to have, you, as a homeowner, may prefer having a faster route to paying off your home and qualifying for an eagle plaque.
Your ability to pay off your mortgage will depend on a variety of factors, including where you live.
Personal finance site SmartAsset recently analyzed home mortgage data and median incomes across the 40 largest metro areas in the U.S. to determine where it’s easiest to pay off a mortgage. To rank among the “easiest,” a city had to have a low income-to-housing-payment ratio.
Nowhere was that ratio lower than in Pittsburgh. With a median property value of $265,000, a median interest rate below 7%, and a median annual income among new homeowners of $101,000, residents in the Pennsylvania city have the lowest income-to-housing payment ratio of 16.36%.
Pittsburgh is the only city analyzed by SmartAsset with a ratio below 17%.
The 10 most affordable cities on SmartAsset’s list did, however, all have ratios below 19.5%:
- Pittsburgh, Pennsylvania: 16.36%
- Houston, Texas: 17.09%
- Detroit, Michigan: 17.54%
- Cleveland, Ohio: 17.60%
- San Antonio, Texas: 17.67%
- St. Louis, Missouri: 17.94%
- Milwaukee, Wisconsin: 17.98%
- Philadelphia, Pennsylvania: 18.47%
- Cincinnati, Ohio: 18.73%
- Austin, Texas: 19.12%
For those in multiple California metro areas, the outlook isn’t as good. The five cities where it is the hardest to pay off a mortgage are all in the Golden State, from the Bay Area to San Diego.
With the highest monthly principal and interest payments, the San Jose metro was the worst overall. There, SmartAsset determined a homeowner is spending more than 29% of their gross income on their housing payment.
Rounding out the 10 metro areas where it’s hardest to pay off a mortgage were all cities in the West:
- San Jose, California
- San Diego, California
- Los Angeles, California
- San Francisco, California
- Riverside, California
- Portland, Oregon
- Denver, Colorado
- Seattle, Washington
- Sacramento, California
- Las Vegas, Nevada
While landing in the middle of SmartAsset’s ranking, the Virginia Beach-Norfolk-Newport News area of Virginia and North Carolina had the highest median interest rate of nearly 7.4% on new conventional mortgages. Alternatively, Austin, Texas, had the lowest median interest rate at 6.5%.
You can view SmartAsset’s full list here.
Last week, the Federal Reserve cut its benchmark interest rate by an unusually large half-point, a dramatic shift after more than two years of high rates that helped tame inflation but also made borrowing painfully expensive for American consumers.
The central bank’s action lowered its key rate to roughly 4.8%, down from a two-decade high of 5.3%, where it had stood for 14 months as it struggled to curb the worst inflation streak in four decades. Inflation has tumbled from a peak of 9.1% in mid-2022 to a three-year low of 2.5% in August, not far above the Fed’s 2% target.
While lower rates give home shoppers more purchasing power, a mortgage around 6% is still not low enough for many Americans struggling to afford a home. That’s mostly because home prices have soared 49% over the past five years, roughly double the growth in wages. They remain near record highs, propped up by a shortage of homes in many markets.
Mortgage rates would have to drop back to near rock-bottom lows from three years ago, or home prices would have to fall sharply for many buyers to afford a home. Neither scenario is likely to happen any time soon.
The Associated Press contributed to this report.
Date: |
Topics
-
BBC News - Top stories
Parents pay tribute to children who drowned off Bournemouth Beach
Joe Abbess, 17, and Sunnah Khan, 12, died after getting into trouble off Bournemouth beach in 2023.4 hours ago -
The Guardian - World
Stones rescues Manchester City with late equaliser against 10-man Arsenal
It was tense, it was physical, it was loaded with drama and storylines and that was before the momentum in this Premier League title-shaper had swung again – away from Arsenal just before ...Yesterday - Premier League -
CBS News - Top stories
Finding Common Ground: Muslims and Jews Bridging the Gap | CBS Reports
Los Angeles is home to one of the largest populations of Jews in the world, and one of the largest populations of Muslims in America. For almost two decades, a group there has been trying to build ...2 days ago -
The Guardian - World
Ukrainians face growing homelessness crisis at home and abroad, report finds
War damage to 2m homes has led to significant rise in rough sleepers and millions of refugees at growing risk in Europe. Russia’s full-scale invasion of Ukraine has triggered a significant rise in ...9 hours ago - Ukraine -
The New York Times - Top stories
State Police in N.J. ‘Weaponized’ Disciplinary Investigations, Reports Find
The state’s attorney general has seized control of the agency’s human resources and equal opportunity functions after investigations into racial and gender bias.1 hour ago -
MarketWatch - Business
5% CDs are a dying breed. Here’s how long cash savers have to lock in their rates.
Many 5% CDs are going away after the Fed’s rate cut, but “the bottom is not falling from deposit rates,” one expert said.23 hours ago -
Inc. - Business
Microsoft CEO Satya Nadella Says the Giant Investment in Generative AI Is Already Paying Off
He pointed to a product made by a Microsoft-owned company as a reason for his bullishness.5 days ago - Microsoft -
ABC News - Top stories
WATCH: Golden retriever finds new trick to playing fetch
Two-year-old golden retriever Remi found a new way to play fetch while her mom runs on the treadmill.2 days ago -
CBS News - Top stories
Harris gains ground with economy-focused voters, CBS News poll finds
The latest CBS News polling shows Vice President Kamala Harris making up some ground regarding what most voters consistently say is the biggest issue this election: the economy. Harris' support ...16 hours ago
More from The Hill
-
The Hill - Politics
Our housing system isn’t working — we need a public option
The current U.S. housing system creates tremendous profits, but it doesn’t work for everyone.22 minutes ago -
The Hill - Politics
What to know as Helene forecast to make US landfall as hurricane
Hurricane Helene could "rapidly intensify" to a Category 3 storm, forecasters say.28 minutes ago -
The Hill - Politics
Lawsuits allege deadly 2021 Texas blackouts were an inside job
Deadly blackouts that killed hundreds of people across Texas in 2021 — which have been widely blamed on failures to properly insulate gas pipelines — may have had a more nefarious cause, a new ...31 minutes ago -
The Hill - Politics
Scaramucci: Trump 'has lost his fighting spirit'
Anthony Scaramucci, a former White House communications director under former President Trump, said that the former president has "lost his fighting spirit," claiming that it doesn't appear to him ...36 minutes ago - Donald Trump -
The Hill - Politics
Mark Cuban rips Trump threat to hit John Deere with massive tariffs: 'Insane'
Billionaire Mark Cuban went after former President Trump on Monday evening for a recent threat the Republican presidential nominee made about John Deere and tariffs. Earlier Monday, Trump ...42 minutes ago - Donald Trump