15 major U.S. cities where starter homes can be found for less than $230,000

As home prices continue to rise, a starter home in a major city might seem more like a myth than a reality.

However, there are 15 major U.S. cities where starter homes can be found for under $230,000, on average, according to a recent analysis by painting services company Five Star Painting. That’s far less than $431,000 — the median price for a home in the U.S., according to the most recent U.S. Census Bureau data.

Starter homes commonly refer to relatively modest houses that are affordable for first-time homebuyers, or more generally, homebuyers with lower incomes. In this context, the study defines a starter home as a single-family home, townhouse or condo that is 1,850 square feet or less. Mobile homes, land lots and multi-family home listings were excluded.

Assuming a 10% down payment, buyers would need incomes around $56,500, excluding other debts, to afford a $230,000 home, according to online realtor Zillow’s affordability calculator. Of course, home prices vary by region, so buyers earning less than that could potentially afford a starter home in certain places.

Based on Redfin real estate listings of the 50 largest U.S. cities, the following 15 markets had the lowest average starter home price, as of August 2023.

1. Detroit: $83,500
2. Cleveland: $109,650
3. Memphis, Tennessee: $142,450
4. Milwaukee: $142,900
5. St. Louis: $149,500
6. Hartford, Connecticut: $164,474
7. Birmingham, Alabama: $166,055
8. Buffalo, New York: $179,900
9. Kansas City, Missouri: $187,950
10. Louisville, Kentucky: $199,615
11. Baltimore: $202,289
12. Indianapolis: $211,517
13. Pittsburgh: $214,589
14. Cincinnati, Ohio: $219,900
15. Oklahoma City: $227,705

Detroit’s real estate market has recovered somewhat since the city declared bankruptcy 10 years ago, but home prices remain well below the U.S. median.

A few reasons contribute to lower homes prices in Detroit, including a declining population and relatively high number of distressed home sales, which is when an owner is forced to sell their home, usually because they can’t afford the mortgage payments. 

Like Detroit, Cleveland is a rust-belt city with a longstanding decline in population. As with most U.S. cities in the last three years, home prices in Cleveland have been on the rise, but they still remain well below the U.S. median.

Generally speaking, the most affordable homes are found in smaller cities that aren’t major coastal hubs. This includes Midwestern cities like Indianapolis, but also Southern cities like Birmingham, Alabama.

In contrast, starter homes in San Francisco cost a median of $999,000, according to the study, making it the least affordable place to become a homeowner. At that price, it’s not really a starter home at all, since homebuyers earning the U.S. median income of $74,580 wouldn’t be able to afford it without significant cash savings.

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