Sky-High Prices Got You Down? Here Are the Top Middle-Class Housing Meccas

From Realtor.com, April 2, 2018 (excerpt)

…The American dream sure ain't cheap these days, or easy to achieve. Politicians may fight over middle-class voters like hyenas over a fresh kill, but all their hyperbolic campaign promises ("time to ignite America's middle-class miracle once again!") and hashtags don't seem to be making life much better for this defining chunk of the nation's population.

The Pew Research Center defines middle-class Americans as those households earning between $42,000 and $125,000 annually—although most hew closer to the $59,000 median. As a group, they face endless challenges: income stagnation, rising costs of living, ever-escalating debt loads.

And then there's perhaps the biggest pain point of all: record-high housing costs in many parts of the country. So much for the middle-class miracle.

But wait—there are still places where the middle class reigns supreme, at least when it comes to housing. And the data team at realtor.com® set out to find them. We figured out which metros have the highest share of homes on the market that are priced just right for that area's middle-income earners—and, at the other end of the spectrum, the markets that have the least housing available for this grand swatch of buyers, whether it's priced substantially above or below their needs.

Best cities for middle-class buyers

"The bottom line here is the middle class is getting squeezed when it comes to homes,” says Robert Hughes, senior research fellow at the American Institute for Economic Research, a nonprofit that focuses on wage distribution research.

“These people don’t have steady, good-paying jobs, and they can’t get financing at that price—it can be very hard for them to buy a house," adds Peter Temin, an economics professor at the Massachusetts Institute of Technology and author of the 2017 book titled "The Vanishing Middle Class: Prejudice and Power in a Dual Economy."

"That spells trouble for them later in life: Owning a home is one way to build wealth," Temin says. "So they don't have a good way to save.They're kind of trapped.”

Worst cities for middle-class buyers

We identified the middle class in each of the nation's 100 largest metros by starting with the median household income for each area, looking at 40% below and 40% above that income. Then we determined what these potential buyers could afford to spend on a 30-year fixed-rate mortgage with a 20% down payment and a 5% mortgage interest rate.

In their ongoing quest to lock in the best home, we're assuming that those on the lower end of the income scale would pay at least 25% of their income, while those at the top of the scale would pay no more than 28%….

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