Known for its thriving tech industry, beautiful green spaces, and rich cultural scene, Raleigh, NC offers a dynamic and inviting environment for residents and visitors alike. If you’re looking to move to Raleigh, then you also may be considering whether to rent versus buy a home in Raleigh. With Raleigh’s real estate market conditions, you’ll find there are pros and cons to both buying and renting a home, making it that much tougher to decide which option suits your goals.

Ultimately, deciding between buying or renting a home in Raleigh is personal and dependent on many factors. From your financial goals and your desire to stay in the area long-term, to what Raleigh neighborhood you hope to live in, there’s lots to consider in the decision process. We’ll guide you through the pros and cons of renting vs buying in Raleigh so you can make a decision that meets your goals this year.

Advantages of buying a home in Raleigh

Building equity

Homeownership presents a unique opportunity to build equity over time. As homeowners make mortgage payments, they gradually accumulate equity, representing the difference between the property’s market value and the remaining loan balance. This growing equity can serve as a valuable asset and a pathway to long-term financial growth, providing potential benefits and opportunities for the future.

Growth in the area

We have seen a steady flow of new residents moving to the Raleigh area within the last two years, and the outskirt towns continue to grow as well. Our area offers the charm of the South with the progressive feel of the North. Opportunities in tech, shopping, dining and academia.  There is something for everyone, with temperate seasons and affordable cost of living compared to some of the Nations bigger meccas.  Whether it’s the charm of a historic bungalow or the modern style of a new build, Raleigh has something to offer everyone.

Tax benefits

Another advantage of buying a home in Raleigh rather than renting is the potential tax benefits you could receive as a homeowner. For example, you may be eligible to deduct mortgage interest or property taxes. You also may be able to further benefit from tax deductions on eligible home improvement expenses and energy-efficient upgrades.

Disadvantages of buying a home in Raleigh

Competition

Some neighborhoods in Raleigh lack inventory so you can still run into bidding wars for popular, well-priced homes. When a new home hits the market, you have to be ready to jump.

Higher interest rates

Interest rates are a nationwide concern right now so that plays a role in the flexibility of a buyer’s budget. Many buyers want to shop at the top of their budget so interest rates really guide a lot of decisions.

Determining if you are ready to buy a house in Raleigh

If you aren’t sure whether or not you should buy a home in Raleigh or rent a home right now, there are a few key factors to take into consideration as you make your decision. 

1. Financial stability: Before starting your homebuying journey, it’s important to have a stable income and a good credit score. You’ll also need to have some additional funds saved for a down payment, closing costs, home insurance, and other expenses that go into buying a home. It’s also a good idea to build an emergency fund in case you have any unexpected expenses.
2. Housing market conditions: Raleigh’s housing market is somewhat competitive, so it’s important to know today’s market conditions – and what you can afford. 
3. Long term commitment: Compared to renting, buying a home is a significant investment – both financially and over time. If you’re not planning to stay in Raleigh for a longer period of time, it may be a better idea to continue renting until you’re ready to stay in the area long term.
4. Personal goals: Lastly, you’ll want to consider your own personal goals and evaluate your priorities before making a decision to buy a home. Are you looking for more space or a big backyard? Do you want a new construction home or an older property with character? Decide what’s important to you in the home search and if buying a home in Raleigh aligns with your goals.
5. Local laws: North Carolina has due diligence and is a buyer beware state. These are factors that are a real adjustment for someone moving from different areas or are new to buying a home. Understanding what that means to you as a buyer and the process is key.

If you’re unsure whether you’re ready to buy, consider consulting with your real estate or financial advisor to fully understand your options.

“In 2026, the decision to buy or rent is less about timing the market and more about personal financial readiness,” says Melinda Golde, director of mortgage banking at Stock Yards Bank & Trust Co. “Buyers should have steady income, manageable debt, and enough savings to cover upfront costs (including a down payment) plus several months of expenses. It also helps to plan to stay in the home for at least 5–7 years to make the numbers work. In the end, buying only makes sense if the payment is truly affordable and supports long-term financial stability – not just because you qualify for the loan.”

“To compare renting versus buying, start by calculating the true monthly cost of homeownership, including mortgage, taxes, insurance, maintenance, and other ongoing expenses, then compare it directly to rent. If owning costs only slightly more and still fits comfortably within your budget, it may be worth it, especially over time as you build equity. But if the gap is significant, renting and investing the difference can be a strong financial strategy. The key is evaluating both costs and long-term benefits over several years, not just focusing on the monthly payment.”

Is it competitive to buy a home in Raleigh?

We are consistently seeing multiple offers on all price points when the home is nice and competitively priced. They go for over asking and in many instances they are under contract within a couple days, so it’s important to be prepared to pull out all the tools and strategies to secure a contract.

Advantages of renting a home in Raleigh

Time to watch the market and adjust to a new area

Finding a short term lease may afford you the time to watch inventory and the interest rates to see if the end of year will see some positive trending in those areas. Raleigh, like lots of major cities, has many smaller community towns around the outskirts. If you are new to the area, renting would allow you six months to a year to familiarize yourself with your commute for work and the amenities that you enjoy.

Lower upfront costs

Buying a home can come with many additional costs beyond the down payment. By renting a home or apartment in Raleigh, you won’t have to worry about these additional, large upfront costs.

Lower maintenance costs

As with upfront costs when renting a home, you’ll also have lower maintenance costs. If something needs to be repaired or replaced, that responsibility falls on your landlord rather than you.

Disadvantages of renting a home in Raleigh

Higher rent prices compared to previous years

The lack of inventory has affected rent prices as well.  For the same monthly payment for a small apartment, you could afford a moderate home mortgage. 

Un-experienced landlords

There are many homeowners that couldn’t sell during a hot market that are new to leasing their home and being a landlord. This could lead to potential future issues as they learn to navigate the responsibilities of a landlord.

Risk of continuous rent increases

A significant disadvantage of renting compared to buying is the lack of control over rent increases. Rent prices can fluctuate annually based on the landlord’s decisions, potentially leading to financial strain or the need to move frequently. In contrast, homeownership offers the stability of a fixed mortgage payment, allowing for predictable housing costs over the long term and providing a sense of security in managing one’s budget.

Renting vs buying in Raleigh: A financial advisor’s final thoughts

“Ultimately, purchasing a home is more than just a financial decision and potential buyers should be prepared for possible price corrections that could reduce or eliminate home equity leaving them underwater, especially with lower down payments.  However, job security, projected income growth, demographic factors, the possibility to decrease housing costs by refinancing if interest rates decline and conversely the protection afforded against rent increases and inflation by locking in a fixed rate all factor into the decision to rent or buy.  It may make sense to continue to rent if your job security is questionable, you need more time to build sufficient savings or improve your credit score, or if it’s likely you may need to relocate in under 5-7 years.  In addition, some people may find more value renting due to amenities like pools and gyms and the peace of mind provided by not having responsibility for maintenance and repairs associated with home ownership.” – Joseph P. Kalmanovitz, CFP, CCO & head of financial planning at Canter Wealth

Redfin does not provide legal, financial, or tax advice. This article is for informational purposes only, and is not a substitute for professional advice from a licensed attorney, financial advisor, or tax professional.

Whether you’re moving on from a historic home in New Orleans or a charming but outdated house in Seattle, selling a fixer-upper isn’t always straightforward. That said, it can be a smart and strategic move when handled correctly. Whether you’re dealing with an inherited property, a home in disrepair, or simply don’t want to take on renovations, understanding how to navigate the process of selling a fixer-upper can help you maximize value while minimizing stress.

In today’s shifting real estate market, selling a fixer-upper requires a different mindset than selling a move-in-ready home. From pricing and buyer targeting to evaluating whether to sell as-is or renovate, every decision plays a role in your final outcome.

What It Means to Be Selling a Fixer-Upper

Selling a fixer-upper means listing a property that needs repairs, updates, or full renovation. These homes often appeal to a more specific group of buyers, including investors, flippers, and those looking to build equity through improvements.

Because of their condition, some fixer-uppers may have difficulty qualifying for traditional financing, especially if major repairs are needed. This can limit the buyer pool and shift demand toward cash buyers or renovation-focused investors.

As Dev Horn, VP of Marketing at WeBuyHouses.com, explains:

“In many areas, housing inventory has grown, making it a buyer’s market. Buyers using financing must purchase a home that is in good condition and passes inspections. Investors, on the other hand, often want houses that need repairs and renovations. Selling to a cash buyer is often the best option for a seller with a distressed property.”

When selling a fixer-upper, recognizing who your likely buyer is can dramatically improve your chances of a fast and successful sale.

The True Cost of Holding a Fixer-Upper

One of the biggest mistakes homeowners make when selling a fixer-upper is underestimating the cost of holding onto the property. Even if you’re waiting for a better offer or considering renovations, expenses continue to build daily.

Andrew Burless of Jeff Buys Your House puts it plainly:

“One aspect of owning a house in poor condition that often goes overlooked is the cost of holding onto a property for an extended period of time. Each day you hold onto a property that is not in good shape can cost you hundreds of dollars in utilities, insurance, taxes and other expenses. If you have a property in poor condition, look for a buyer who can offer the certainty of an as-is purchase with a fast close.”

For many sellers, minimizing holding costs and avoiding repairs matters just as much as maximizing the final sale price. The longer the property sits, the more those carrying costs can eat into your potential profit. This is why some homeowners prioritize speed and certainty over squeezing out every last dollar.

Selling a Fixer-Upper As-Is vs. Making Repairs

A central decision when selling a fixer-upper is whether to renovate or sell the property as-is. Both approaches have clear advantages and trade-offs.

Renovating can increase your home’s value and open the door to traditional buyers. However, it also comes with upfront costs, potential delays, and uncertainty around return on investment.

Selling as-is, on the other hand, simplifies the process. You avoid repairs, showings are often minimal, and closing timelines are typically faster.

Brian Smith, Owner of Cedar Cash Home Buyers, explains this balance:

“Selling a house in poor condition can absolutely make sense, depending on the seller’s priorities. If maximizing price is the goal, making repairs or listing on the open market is usually the better route—but that comes with time, uncertainty, and upfront cost. For homeowners dealing with major repairs, inherited properties, or tight timelines, selling as-is to a professional buyer can provide a faster, simpler, and more predictable outcome. The key is understanding the trade-off between price and convenience and choosing the path that best fits your situation.”

When deciding whether to make repairs, it’s important to focus on updates that could meaningfully improve the home’s value or buyer appeal. In some cases, basic cleaning, landscaping, paint touch-ups, or minor repairs may help attract more buyers without requiring a full renovation.

Why Cash Buyers Dominate the Fixer-Upper Market

Cash buyers play a central role in selling a fixer-upper. These buyers are typically investors who specialize in purchasing distressed properties, renovating them, and either reselling or renting them.

Because they don’t rely on financing, cash buyers can close quickly and purchase properties in virtually any condition.

Ryan David, Owner of WeBuyHousesInPennsylvania.com, highlights why they’re such a natural fit:

“Selling a house in poor condition is a fine idea as long as you know who you’re selling it to. A local cash homebuyer has no problem buying a fixer-upper because they’ll purchase it as-is. Most cash home buying companies love homes in poor shape because those are prime candidates to fix and flip.”

For homeowners focused on convenience, speed, and certainty, selling a fixer-upper to a cash buyer is often the most practical path.

The Investment Appeal of Fixer-Uppers

While selling a fixer-upper may feel like offloading a problem, investors see these properties as opportunities. A home in poor condition can often be transformed into a high-value asset with the right improvements.

Margo McDonnell, President and CEO of 1031 CORP, explains this investor mindset:

“A property in poor condition can present an excellent opportunity for buyers, particularly investors or 1031 exchange participants, to acquire a structurally sound building and add value through strategic improvements. With continued demand for affordable housing, well-renovated rental properties remain highly sought after.”

Understanding this perspective can help you better position your property when selling a fixer-upper. Instead of focusing only on flaws, highlight features like location, lot size, layout, historic character, or renovation potential.

How to Price a Fixer-Upper

Pricing is one of the most critical aspects of selling a fixer-upper. Because the home requires work, it won’t command the same price as comparable move-in-ready properties.

Most investors use formulas based on after-repair value (ARV), estimated renovation costs, and desired profit margins. This often results in lower initial offers, but these offers reflect the realities of the investment.

When selling a fixer-upper, realistic pricing is key to attracting interest and avoiding long days on market. Overpricing can deter investors, while competitive pricing can generate multiple offers and faster closings.

Marketing Tips for Selling a Fixer-Upper

Effective marketing can make a significant difference when selling a fixer-upper. The goal is to attract the right buyers while setting clear expectations.

Key strategies include:

• Emphasizing opportunity with phrases like “investment potential” or “needs a little TLC.”
• Being transparent about the property’s condition to build trust with buyers.
• Using clear, honest photos that reflect the home accurately.
• Targeting investor-friendly platforms and buyer networks.

When selling a fixer-upper, the goal isn’t to make the home look perfect—it’s to showcase its potential and connect with buyers who can see that vision.

Choosing the Best Strategy for Selling a Fixer-Upper

Ultimately, selling a fixer-upper comes down to your priorities. Some sellers are focused on maximizing price, while others value speed, simplicity, and certainty.

If you have the time and resources, making improvements and listing on the open market may yield a higher return. If you’re dealing with financial constraints, major repairs, or a tight timeline, selling as-is to a cash buyer can provide a faster and more predictable outcome.Selling a fixer-upper doesn’t have to be overwhelming. With the right strategy, a clear understanding of your options, and realistic expectations, you can turn a challenging property into a successful sale.

Key Takeaways:

• PMI is required on conventional loans with less than 20% down.
• It adds to your monthly costs but can be removed once you reach 20% equity.
• You can avoid PMI with a larger down payment, VA loan, or piggyback loan.

If you’re buying a home and planning to put down less than 20%, chances are you’ve come across the term PMI. But what is it, why do you need it, and how much will it actually cost you? Whether you’re purchasing a home in Denver, CO or looking at homes for sale in Tampa, FL, understanding PMI is key to budgeting smart. 

In this Redfin article, we’ll break down everything you need to know about private mortgage insurance (PMI) – including how to avoid it or remove it when the time is right.

What is private mortgage insurance (PMI)?

PMI stands for private mortgage insurance. It’s a type of insurance that protects your lender, not you, if you stop making payments on your mortgage.

Lenders require PMI on conventional loans when your down payment is less than 20% of the home’s purchase price. While it helps you buy a home with a smaller upfront investment, it adds to your monthly costs.

Why do lenders require PMI?

PMI reduces the lender’s risk. When you put down less than 20%, you’re considered a higher-risk borrower. PMI provides the lender a financial safety net in case you default on your loan.

Types of private mortgage insurance

There are several types of PMI, and the right one for you depends on your financial situation and lender policies:

• Borrower-paid PMI (BPMI): This is the most common type. You pay the premium as part of your monthly mortgage payment. It can be canceled once you reach 20% equity.
• Lender-paid PMI (LPMI): The lender pays for the insurance, but you’ll typically get a higher interest rate in return. This type can’t be canceled, removing it requires refinancing.
• Single-premium PMI: You pay the entire premium upfront at closing, either in cash or financed into your loan. It lowers your monthly payment but carries risk if you sell or refinance early.
• Split-premium PMI: A mix of upfront and monthly payments. You pay part of the premium upfront and the rest in monthly installments.

Understanding the differences can help you choose the most cost-effective option based on how long you plan to stay in the home and your budget.

How much does PMI cost?

The cost of PMI depends on a few factors, including your loan amount, credit score, and down payment. But here’s a general idea:

• Typical PMI cost: 0.3% to 1.5% of the original loan amount per year
• Example: On a $300,000 loan, PMI might cost $75 to $375/month

Tip: You can sometimes reduce PMI rates by improving your credit score or putting down more money upfront.

Filip Telibasa, CFP and owner of Benzina Wealth, says many homeowners are surprised by refinance-related costs such as prepaid taxes and insurance, escrow funding requirements, transfer taxes in certain states, and the reality that “no closing cost” refinances still include costs somewhere in the loan structure. He recommends requesting a full Loan Estimate early in the process and comparing the total cash to close rather than focusing only on the monthly payment. 

Ways you can pay for PMI?

PMI can be paid in different ways, depending on the loan and lender:

• Monthly premium (most common): Included in your monthly mortgage payment
• Upfront premium: Paid at closing
• Hybrid: Some paid upfront, some monthly

Your lender will explain your options during the loan application process.

When and how can you remove PMI

PMI isn’t permanent. You can remove it once you’ve built enough equity in your home.

You can request PMI cancellation when:

• You’ve reached 20% equity in your home (based on the original purchase price)
• You have a good payment history
• Your mortgage is current

PMI is automatically removed when:

• You reach 22% equity in your home (if you’re current on payments)

You can also refinance your mortgage if your home value has increased significantly, allowing you to eliminate PMI sooner.

Telibasa notes that homeowners should evaluate refinancing beyond simply securing a lower interest rate. He says the true breakeven point depends on how long you plan to stay in the home, whether the lower payment meaningfully improves cash flow, and what you plan to do with the savings each month. For some homeowners, investing the difference may create more long-term value than increasing discretionary spending.

Check out our guide: How Much Equity Do I Have in My Home? Here’s How to Calculate Home Equity

How to avoid PMI altogether

Here are a few ways to skip PMI when buying a home:

• Put down at least 20% on a conventional loan
• Consider lender-paid PMI (LPMI): The lender covers the insurance but typically charges a higher interest rate
• Use a piggyback loan: Take out a second loan to cover part of the down payment
• Explore VA loans (for eligible veterans and service members), which don’t require PMI

PMI vs. other types of mortgage insurance

Not all loans use PMI. When researching mortgage insurance, it’s easy to confuse PMI with other similar-sounding terms. Here’s a quick breakdown of the differences:

Loan Type	Insurance Type	Required If…
Conventional	PMI	Down payment < 20%
FHA	MIP (Mortgage Insurance Premium)	Always required, regardless of down payment
VA	No PMI	May require a funding fee
USDA	Guarantee Fee	Similar to PMI, required for all USDA loans

What’s the difference between PMI, MIP, and MPI?

• PMI (Private Mortgage Insurance): Required for conventional loans when your down payment is less than 20%. Protects the lender if you default.
• MIP (Mortgage Insurance Premium): Required for FHA loans. Unlike PMI, MIP is typically required for the life of the loan, unless you refinance.
• MPI (Mortgage Protection Insurance): Optional insurance that pays your mortgage if you become disabled, lose your job, or pass away. This protects you or your family, not the lender.

Understanding these terms can help you choose the right loan product and avoid unnecessary confusion during the mortgage process.

Is PMI worth it?

PMI increases your monthly housing costs, but it can be a worthwhile tradeoff if it helps you become a homeowner sooner. This is especially in fast-growing markets, where home prices may rise faster than you can save for a 20% down payment.

It’s not ideal for every buyer, but if you’re financially stable and plan to stay in your home long enough to build equity, PMI can be a short-term cost with long-term benefits.

Pros of PMI:

• Buy a home sooner: Avoid waiting years to save a full 20% down payment.
• Start building equity right away: Rising home values may outpace your savings rate.
• PMI can be temporary: Most borrower-paid PMI can be removed once you reach 20% equity.
• Potential tax deduction: PMI premiums may be deductible (consult a tax advisor).

Cons of PMI:

• Added monthly cost: Can range from $75 to $375/month or more, depending on your loan.
• Doesn’t protect you: PMI covers the lender, not the borrower, in case of default.
• Harder to remove in some cases: For example, lender-paid PMI (LPMI) requires refinancing.

Buying a home in the U.S. as a non-U.S. citizen can be tricky, at least on the surface. If you’re wondering whether a citizen of another country can buy property in the U.S., the short answer is yes, though it’s easiest if you’re buying the property in cash. If you’re seeking financing from a financial institution in the U.S. to purchase real estate, as a non-citizen getting a mortgage is the most challenging part.

In this Redfin article, we’ll outline how to buy a house if you’re not a U.S. citizen, whether you’re looking for a home in Miami, FL, or in Atlanta, GA. If you’re prepared to purchase property in the U.S., but you’re not a U.S. citizen, here’s essential information to know.

Anyone may buy and own property in the United States, regardless of citizenship. Historically, there have been no laws or restrictions that prevent an individual of any foreign citizenship from owning or buying a home in the U.S. However, as of 2026, about 36 states including Florida, Texas, and Ohio have passed new laws that restrict land purchases for non-citizens near military bases or farms.

In fact, many foreign nationals purchase vacation homes in the United States, and there are many wealthy foreign investors who purchase investment property such as multi-unit apartments or condos, single-family homes, and even business properties such as shopping malls. So whether you’re a new resident searching for a two-story home for you and your household, or an investor with interest in vacation property, there are several resources and options available to you.

Buying a house in the U.S. as a non-U.S. citizen is simple if you plan to pay in cash – or have all the money saved to buy the home in one lump sum. If you’re not in the financial position to be able to purchase a home with cash, you’ll need to obtain a mortgage loan to purchase property. Getting a mortgage pre-approval early in the process can help you understand your budget and show sellers you are a serious buyer. This is where the process can become more complex.

Your ability to get a mortgage as a non-U.S. citizen depends on your residency status. If you’re planning to buy a home and have no intention of moving to the U.S., the only loan you may qualify for is a foreign national loan. Foreign national loans tend to have a higher down payment, higher interest rates, and you will need to have an Individual Taxpayer Identification Number (ITIN).

If you’re a permanent resident with a green card, a non-permanent resident with a valid work visa, or a refugee granted asylum, you can qualify for a mortgage. A lender will need to be able to verify the legal residency of the applicant, so foreign nationals whose primary residence is not in the U.S. may have a harder time getting a mortgage. Because of these nuances, it is helpful to understand how your specific legal status changes your requirements. 

“The ability to purchase property in the United States is open to non-citizens, but every buyer’s path looks a little different,” explains Ellen Sullivan, Founding Attorney of Cambridge Immigration Law. “Factors like visa status, income sources, and long-term plans can all influence how the process unfolds, particularly when it comes to financing and tax considerations. Research how your visa status affects your eligibility for a loan. Make sure that you show the right documents to your lender and agent so that they know your actual visa status. Taking the time to understand those issues upfront can make the entire experience smoother and far more predictable.”

This preparation is especially important when exploring specific government-backed programs. You may be wondering if you can buy a home with an FHA loan if you’re not a U.S. citizen. In most cases, you can apply for an FHA loan as long as you provide proof of your permanent residency. However, in order to qualify for an FHA loan, the home you’re looking to buy will need to be your permanent residence, not a second home or vacation residence.

Additionally, most U.S.-based mortgage lenders look at a borrower’s U.S. credit history to determine their eligibility for a mortgage loan. As a non-U.S. citizen, you may not have a U.S. credit report or your credit report may not have enough information for lenders to establish your creditworthiness. Therefore, it can make it difficult for lenders to analyze the risk of loaning you money to purchase a home. That means your lender will have to use another method for evaluating your risk as a borrower.

Due to the complexity of analyzing risk, many lenders simply opt to not lend money to foreign citizens. It may take you longer to find a lender who is willing to work with you, and it may take longer to get approval for your mortgage loan. You may also pay a higher interest rate. If you’re concerned about securing a mortgage loan due to your credit, consider taking the time to establish or improve your credit score before buying a home as a non-U.S. citizen.

Eventually, you might decide to sell your U.S.-based property. Before you purchase new property in the U.S., it’s good to be aware of the rules and requirements should you decide to sell your property in the future. The IRS requires that buyers of property from non-U.S. citizens withhold 15% of the gross sale price to ensure foreign nationals do not evade U.S. income tax on their sold property.

However, there are specifics that may apply to your sale; for example, the 15% withholding can be reduced to 10% or even 0% for homes under $1M but over $300k if the buyer uses it as a residence. If the buyer does not withhold this amount, they may be responsible for additional taxes. The rules surrounding this are somewhat complex but are outlined in the IRS FIRPTA publication. You can find more information in the International Tax Gap Series. Working with a real estate agent you trust who understands the complexities of buying a home as a non-U.S. citizen is key, so you know they have your best interest in mind.

The dream has long been tied to homeownership, leading many people to view renting as a temporary step rather than a long-term housing plan. This mindset often pressures people to rush into one of the biggest financial commitments of their lives before they are truly prepared. 

However, many financial experts now encourage people to evaluate renting and homeownership based on personal financial readiness and goals. Continuing to rent may provide greater financial flexibility depending on a person’s income, savings goals, and lifestyle needs, while buying a home can offer stability, equity-building potential, and the opportunity to put down long-term roots. As you think about a move to a new home in Evanston, IL, or across the country for a home in Fresno, CA, this Redfin article delves into why renting can be strategic, when homeownership can be the right next step, and how to evaluate which option best supports your financial and lifestyle goals.

Evaluating your financial readiness

A thorough financial evaluation is the foundation for deciding your housing path. Rather than assuming one option is always better, it’s helpful to compare both based on your income, savings, debt, and long-term goals. 

Renting can provide time to strengthen credit, grow savings, and prepare for the full costs of homeownership beyond just a mortgage. Buying, on the other hand, may make sense if you have a stable income, a solid emergency fund, manageable debt, and enough savings for upfront and ongoing costs. 

Clint Stucky, Marketing Director at Industrial Federal Credit Union, notes that renting “can provide time to strengthen credit, grow savings, and prepare for the full costs of homeownership beyond just a mortgage.” If buying a home would leave you with little financial flexibility, that may be a sign to continue renting until you’re more prepared. 

>>Read: What Does “Financially Ready” Really Mean?

Down payment and debt load

Your down payment, monthly housing costs, and debt-to-income ratio all play a role in determining whether buying is realistic. While some lenders may approve loans with higher debt-to-income ratios, that doesn’t always mean taking on that amount of debt is the best choice. 

Justin Boggs, of Optima Capital, LLC, advises keeping housing debt between 25-35% of your income to maintain your investment goals for the long run. A helpful way to assess your overall readiness is to look at consistency, including steady income, manageable debt, and the ability to comfortably handle upfront costs and ongoing maintenance.

For renters, this same evaluation can help determine whether continuing to lease supports other priorities, such as paying down debt, building an emergency fund, investing, or saving for a future down payment. 

>>Discover: How Much House Can You Afford?

When renting may make sense

Renting can be a strategic choice when flexibility, liquidity, or short-term mobility are priorities. If you may move in the next few years, or want to avoid unexpected maintenance costs, renting can offer more freedom and predictability.

Renting may be especially helpful if you’re changing careers, relocating, downsizing, or unsure about your long-term plans. It can also allow you to live in a desired neighborhood without taking on the full financial responsibility of ownership.

Mackenzie Richards at SKWealth emphasizes that renting can offer flexibility at any age. For clients looking to downsize, selling their home first and moving into a rental can allow them to shop for a new property without making the sale of their old home a contingency. Renting first can also be helpful after a recent move, giving you time to get familiar with the area before committing to a purchase.

When buying may make sense

Buying can be a strong choice when you’re financially prepared, plan to stay in the home long enough to offset upfront costs of buying a home, and want more control over your living space. Homeownership can offer long-term stability, the ability to build equity, and potential appreciation over time.

For many buyers, a fixed-rate mortgage can also provide more predictable principal and interest payments compared with rent, which may rise over time. Ownership may also allow you to renovate, personalize your space, and establish deeper roots in a community.

Buying may make sense if you have stable income, a strong emergency fund, a manageable debt load, and a clear understanding of the full costs of ownership, including property taxes, homeowners insurance, maintenance, repairs, and possible HOA fees.

Misconceptions about wealth building

One common misconception is that renting is always “throwing money away.” Another is that buying is always the better financial move. In reality, either option can support wealth building depending on your circumstances. 

AJ Ayers, Co-Founder of Brooklyn Fi, says, “It’s a common belief that homeownership is always the better financial move, but it only holds when you’re truly prepared.” The hardest hurdle for renting is the stigma against it, but “in most major cities, renting can be the smarter financial move, with flexibility as a serious bonus.”

Sean Ingraham, Senior Vice President at FirstService Residential, asserts that it’s time to retire the old advice that everyone should be a homeowner. He suggests that for many, especially in expensive markets, “renting a home and investing the difference can build more wealth than taking on a massive mortgage.” Ayers adds that, in some situations, home values can appreciate around 3% a year on average, while a diversified investment portfolio historically returns closer to 8%. 

At the same time, homeownership can be an important wealth-building tool for prepared buyers. Mortgage payments can build equity, and homeowners may benefit from appreciation over time. Depending on your situation, ownership may also provide tax advantages and long-term housing cost stability. 

Comparing the costs of renting and buying

The long-term cost of renting versus buying varies by market, interest rates, home prices, rent prices, and how long you plan to stay in the home. In some places, renting may be more affordable month to month. In others, buying may become more cost-effective over time.

Owning a home includes more than a mortgage payment. Buyers should also account for property taxes, insurance, maintenance, repairs, closing costs, HOA fees, and potential unexpected expenses. However, ownership can also provide equity, stability, and the possibility of appreciation.

Renting typically comes with fewer surprise costs and less responsibility for maintenance. Renters pay for flexibility, liquidity, and predictable cash flow, though they may face rent increases or limits on how much they can personalize their space.

Using a rent-vs-buy calculator can help compare the full financial picture, including upfront costs, monthly payments, investment opportunities, and how long you expect to stay.

How to decide between renting and homeownership

Ultimately, the decision between renting or homeownership should be based on financial readiness, lifestyle goals, and stability. For some people, continuing to rent can be the smarter, more financially responsible choice when your current lifestyle, long-term plans, or savings goals align better with the flexibility and predictable costs of leasing. Shelley Carlson, EVP of Marketing and Relationship Management at 1st University Credit Union, states that, “Renting isn’t falling behind. It’s often the smarter choice when you’re still building your financial footing.” For others, homeownership may offer greater stability, long-term equity building, and the ability to create a home that fits their needs over time. Evaluating both options carefully helps ensure your choice supports your long-term financial health. 

>>Read: Renting vs Buying a House

Frequently asked questions

Is renting truly a waste of money?

No. Renting is an exchange of money for a predictable place to live, flexibility, and freedom from major maintenance expenses. The biggest misconception is that renting is throwing money away, when in reality, you are paying for flexibility, liquidity, and predictable cash flow.

How do you calculate financial readiness?

To assess readiness, run a rent-versus-buy analysis that compares the long-term cost of renting against the opportunity cost of tying up a 20% down payment in a home.

What is a good housing debt-to-income ratio (DTI)?

Justin Boggs recommends keeping your housing debt between 25-35% of your income to secure your long-term investment goals, even if some lenders offer loans that exceed this threshold.

Should market conditions influence my decision to buy?

Market conditions should be part of your decision, but they shouldn’t be the only factor. Mortgage rates, home prices, inventory, and local rent trends can all affect affordability. However, the decision to buy should still be driven primarily by personal factors, such as income stability, savings, debt, family needs, and how long you plan to stay in the home. Waiting for rates to drop can be difficult to time, since falling rates may also put upward pressure on home prices. 

>>Read: Is Now a Good Time to Buy a House?

Whether you’re looking at Seattle rentals or you’re exploring Round Rock homes for sale, this Redfin article explores how to elevate your living space without depleting your finances by using budget smart home devices and tips. 

Smart home technology offers convenience, security, and significant energy savings. Choosing the right products and implementing them thoughtfully is key to a cost-effective upgrade. By following these seven essential steps, anyone can seamlessly transition their house into a smarter, more efficient home.

1. Explore companion apps

Smart home devices often rely on a dedicated companion app for setup and management. Roman Bord, co-founder of Stormotion suggests, “Before committing to a smart home device purchase, check the usability of companion apps.” Download and test smart home apps if possible, or read reviews focusing on ease of use, stability, and feature set. A device with robust physical hardware can be hindered by a poorly designed app. 

Bord says, “A well-built application allows you to create a smart home ecosystem throughout your home and get long-term value from your devices.” Look for apps that provide centralized control, clear onboarding instructions, and regular updates to ensure security and compatibility.

2. Consider which smart hub is right for you

A smart hub acts as the brain for your connected devices, allowing them to communicate with each other. Choosing the right hub is critical for building a cohesive and budget-friendly ecosystem. Rob Wassink with Qub, a UK-based lighting retailer, recommends “focusing on devices that use open standards like WiFi or Zigbee so you are not locked into one ecosystem that can scale gradually.” 

Major platforms like Amazon Alexa, Google Home, and Apple HomeKit offer varying levels of compatibility and features. Select a hub that supports the communication protocols of your planned devices to avoid buying incompatible technology later.

Kevin McAleer of Kev’s Robots shares how other assistants exist outside of the major brand names, and recommends Home Assistant Green for an open-source smart home hub.

3. Shop for smart home products

When shopping for budget smart home devices, focus on foundational devices that offer the highest return on investment in terms of utility and efficiency, such as:

• Smart lights. Start with smart bulbs in high-use areas to control lighting remotely and set schedules. Dennis, founder of VerLuce shares how “smart under cabinet lights can completely transform your kitchen atmosphere”. He suggests setting up “daily routines through your smart home app so your cabinet lights automatically adjust to your preferred color temperature and brightness”.
• Smart thermostats. These learn your habits and adjust temperatures automatically, drastically reducing heating and cooling costs.
• Smart switches and plugs. Convert existing, non-smart appliances (like lamps or coffee makers) into connected devices without replacing them.
• Air purifiers: Automate air quality control based on the time of day or internal air sensors.
• Seek open standards. Prioritize devices supporting current open connectivity standards, such as Matter and Thread, to ensure long-term compatibility across different ecosystems.
• Monitor Sales. Budget-friendly devices are often heavily discounted during major retail holidays, offering the opportunity to expand your setup for less.

When it comes to creating a space where smart devices really shine, Home-A-Genius says, “Most homeowners don’t start with a fully automated home right away. They usually begin with a few key devices that make an immediate difference.” A few of Home-A-Genius’s recommended devices are: Philips Hue smart lights and a Home-A-Genius Smart Switch.

4. Install devices and schedule shortcuts and timers

Proper installation ensures optimal performance. Once installed, immediately leverage automation features. By taking advantage of smart home automation, Rob Skuba with National Smart Home shares how your home can have “lights that adjust without thinking, music that’s already there when you walk in” and how you can create a “home that responds instead of being managed.” By using a companion app or smart hub interface it’s easy to:

• Schedule timers. Program lights and thermostats to turn off or adjust when you are typically asleep or away from home.
• Create shortcuts (routines). Set up routines, such as a “Good Morning” shortcut that raises the thermostat, turns on a light, and begins brewing coffee with a single voice command.
• Implement geofencing. Use location services to automatically adjust your smart devices as you arrive or leave, maximizing energy efficiency.

5. Secure your setup: Essential smart home security tips

Securing your smart home is paramount, even on a budget. All connected devices represent a potential entry point for unauthorized access. Implement these practices to ensure a secure setup:

• Use strong passwords: Change default passwords on all new devices immediately. Use unique, complex passwords for your Wi-Fi network and device accounts.
• Enable two-factor authentication (2FA): Where available, 2FA adds a critical layer of protection to your device accounts.
• Isolate devices: If possible, place smart devices on a separate guest or IoT (Internet of Things) network to isolate them from your primary computers and sensitive data.

6. Future-proofing your home: Seamlessly integrate new devices

A budget approach does not mean sacrificing future growth. Plan your smart home with expandability in mind:

• Choose compatible brands. Stick to device brands known for cross-platform support and continued software updates.
• Phased investment. Instead of buying many low-cost, unconnected devices at once, invest in high-quality core pieces that can integrate with various products as your budget allows.
• Evaluate new protocols. Stay current on connectivity standards (like Matter) that promise easier integration between different manufacturers, making future integrations hassle-free.

7. Maximize savings: Use automation for energy efficiency

The true cost savings from smart homes come through automation. Use your devices to minimize wasted energy:

• Optimize thermostat settings. Fine-tune your smart thermostat’s scheduling features to avoid heating or cooling an empty house. For every degree you adjust your thermostat, you can save on utility costs.
• Automate power-draining devices. Use smart plugs to completely cut power to devices that draw “phantom load” power when not in use (e.g., entertainment systems, chargers).
• Monitor usage data. Utilize the energy monitoring features often built into smart plugs and companion apps to identify which devices consume the most power and adjust their usage patterns accordingly.

>> Read: Future-Proof Your Home: 2026 Smart Home Energy Management Ideas

Now you’re ready to automate your home

Smart home devices are an accessible way to upgrade your home’s functionality and value without a massive investment. By strategically choosing budget smart home devices and tips that prioritize compatibility, security, and energy savings, you can create a truly intelligent and cost-effective living environment.

>> You might also be interested in reading Does Smart Home Automation Increase Home Value?

Key takeaways

• Los Angeles, Anaheim, and San Diego are the most expensive cities in the U.S., with sky-high prices leaving fewer than 10% of homes affordable to locals.
• The most expensive places to live are all located on the coasts—led by California, which accounts for six of the top ten.
• House prices skyrocketed during the pandemic and have only recently started to level out, straining budgets and putting a lid on demand in many places.

Bustling neighborhoods, iconic landmarks, and an abundance of amenities are hallmarks of America’s largest cities—but in some places, these benefits come at a cost. All of the country’s most expensive major housing markets are concentrated on the coasts, where limited space and tight supply have long pushed prices upward. 

Prior to the pandemic, though, costs were more manageable. It wasn’t until after the pandemic housing boom that it became largely unaffordable to buy a home in many coastal cities, contributing to a prolonged slowdown that is only just starting to recover. 

So, which cities are the most expensive? When will affordability improve? Let’s discover the most expensive cities to live in and buy a house in 2026, where housing can be exceptionally expensive.

The 10 most expensive cities in the U.S.

1. Los Angeles, CA

2.0% of homes affordable on area’s median income | +0.8% year over year

• Median household income: $97,775
• Median sale price: $930,000
• Median rent price: $2,682
• Income needed to afford median-priced home: $221,646
• Share of income needed to afford a typical home: 68.0%
• Cost of living: 52% higher than the national average

Los Angeles is a city of sunshine, glamour, and affluence, drawing people in with its beaches and Hollywood dreams. But those perks come at a cost: Buying a home will set you back close to $1 million, and often more depending on the neighborhood. This lack of affordability is one reason L.A. has lost tens of thousands of residents since 2024.

Add in the necessity of a car and pricey groceries, plus incomes that largely fall short, and Los Angeles becomes America’s most expensive place to live. Climate risks, namely heatwaves, drought, and wildfires, are also playing a growing role in daily life.

Los Angeles homes for sale | Los Angeles houses for rent | Lost Angeles apartments for rent

2. Anaheim, CA

6.6% of homes affordable on area’s median income | +1.7% year over year

• Median household income: $126,178
• Median sale price: $1.25 million
• Median rent price: $2,500
• Income needed to afford median-priced home: $291,828
• Share of income needed to afford a typical home: 69.4%
• Cost of living: 64% higher than the national average

Anaheim is best known for Disneyland, but there’s more to the city than castles and costumes. Pro sports teams, a bustling convention center, and millions of annual visitors sustain the local economy, ensuring there’s always something going on besides parades down Main Street. 

However, with median sale prices topping $1 million and rent costs running above average, affordability has become a major challenge for locals—one reason residents across Orange County are pushing for rent control. Daily expenses like groceries, entertainment, and transportation also run 10-34% above the national average.

Anaheim homes for sale | Anaheim houses for rent | Anaheim apartments for rent

3. San Diego, CA

7.2% of homes affordable on area’s median income | +2.6% year over year

• Median household income: $115,304
• Median sale price: $930,000
• Median rent price: $3,033
• Income needed to afford median-priced home: $221,807
• Share of income needed to afford a typical home: 57.7%
• Cost of living: 47% higher than the national average

San Diego is “America’s Finest City” for good reason. Surfing, craft breweries, fresh fish tacos, and pleasant year-round weather make for a generally great quality of life. Biotech, military, and tourism power the job market.

However, the beachside dream comes at a cost—namely, the third-most expensive housing market in the nation. Prices surged during the pandemic and have only recently begun to cool. They have been outpacing wages for years and are a major reason why San Diego remains one of the most expensive cities in the nation.

San Diego homes for sale | San Diego houses for rent | San Diego apartments for rent

4. San Francisco, CA

7.5% of homes affordable on area’s median income | +0.9% year over year

• Median household income: $162,117
• Median sale price: $1.73 million
• Median rent price: $3,950
• Income needed to afford median-priced home: $405,307
• Share of income needed to afford a typical home: 75.0%
• Cost of living: 64% higher than the national average

San Francisco pairs postcard-perfect views of the Golden Gate Bridge with world-class amenities, all packaged in a walkable layout. However, an eye-watering cost of living has made it a difficult place for most residents to afford. 

Tech giants have transformed the quirky city into a haven for high-earning professionals, sending housing prices sky-high over the past 20 years. The AI boom has only intensified demand in the Bay Area, helping SF regain its title as the most expensive housing market in the country. For those who can swing the cost, though, San Francisco’s mix of innovation, culture, and scenic beauty makes the high price of entry feel like a fair trade.

San Francisco homes for sale | San Francisco houses for rent | San Francisco apartments for rent

5. San Jose, CA

9.6% of homes affordable on area’s median income | +2.3% year over year

• Median household income: $176,401
• Median sale price: $1.65 million
• Median rent price: $3,100
• Income needed to afford median-priced home: $389,327
• Share of income needed to afford a typical home: 66.2%
• Cost of living: 84% higher than the national average

San Jose sits in the heart of Silicon Valley, where tech giants feed a fast-paced economy and subsequent soaring living costs. The city has the second-most expensive housing market in the nation, and basic expenses like electricity and dining run 18-59% above average. The result is a place that can feel both full of opportunity and impossible to afford for anyone but the tech crowd 

Still, San Jose’s appeal is hard to deny. Dry weather, high-paying jobs, and well-maintained parks help make it a great place to call home.

San Jose homes for sale | San Jose houses for rent | San Jose apartments for rent

6. New York, NY

9.9% of homes affordable on area’s median income | +1.7% year over year

• Median household income: $98,287
• Median sale price: $790,000
• Median rent price: $3,606
• Income needed to afford median-priced home: $201,774
• Share of income needed to afford a typical home: 62.0%
• Cost of living: 86% higher than the national average

New York City’s miles of skyscrapers, around-the-clock buzz, and global appeal also come with sky-high prices. America’s largest city is the sixth-most expensive, where buying can cost millions, rents often swallow entire paychecks, and a casual night out can feel like a splurge.

However, New York’s affordability varies widely depending on which borough you live in. If you’re looking in Manhattan, for example, you’ll find house prices in the millions and a cost of living 139% above the national average. On the other hand, further out in Queens, housing costs get cut in half (although they are still often unaffordable).

New York homes for sale | New York houses for rent | New York apartments for rent

7. Providence, RI

11.8% of homes affordable on area’s median income | +0.5% year over year

• Median household income: $94,620
• Median sale price: $530,000
• Median rent price: $2,150
• Income needed to afford median-priced home: $131,313
• Share of income needed to afford a typical home: 41.6%
• Cost of living: 11% higher than the national average

A colonial city set on the Atlantic, Providence might not be the first place that comes to mind when thinking of the most expensive housing markets. But years of strong competition and tight supply have led to rapid price growth for buyers and renters—and it’s showing little sign of slowing down. 

For example, homebuyers are dealing with prices more than 33% higher than they were in 2022—more than three times the nationwide growth rate. Even so, Providence is full of charm and can be a wonderful place to call home, with historic neighborhoods, walkable streets, and popular events like WaterFire.

Providence homes for sale | Providence houses for rent | Providence apartments for rent

8. Boston, MA

13.5% of homes affordable on area’s median income | +2.8% year over year

• Median household income: $127,467
• Median sale price: $767,750
• Median rent price: $3,500
• Income needed to afford median-priced home: $190,299
• Share of income needed to afford a typical home: 44.8%
• Cost of living: 48% higher than the national average

Boston has been among the most expensive places to live in the U.S. for years, and 2026 is no different. A combination of limited space, insufficient homebuilding, and a strong job market centered around biotechnology keeps demand high. As a result, both home prices and rents have risen faster than the median income for years. 

Boston’s pricey housing has begun affecting migration trends, with more long-time residents and young adults moving away in search of affordability. Regardless, the city can be a great place to live, with centuries-old parks, New England personalities, and a gorgeous waterfront.

Boston homes for sale | Boston houses for rent | Boston apartments for rent

9. Riverside, CA

13.6% of homes affordable on area’s median income | +2.2% year over year

• Median household income: $97,116
• Median sale price: $588,000
• Median rent price: $2,200
• Income needed to afford median-priced home: $142,507
• Share of income needed to afford a typical home: 44.0%
• Cost of living: 16% higher than the national average

Riverside used to be an affordable refuge from pricey coastal cities, but rising demand has nudged up living costs at a fast clip for years. Housing is still less expensive than in Los Angeles, but the gap is shrinking. Annual incomes are also lower and do not provide enough for many residents. 

Adding to the costs, commuters who face long drives into nearby cities feel the pinch in gas prices—especially so with the prolonged conflict in the Middle East. Still, for many residents, the scenic mountain views, slower pace of life, and growing job market are worth the trade-off.

Riverside homes for sale | Riverside houses for rent | Riverside apartments for rent

10. Nassau County, NY

14.2% of homes affordable on area’s median income | +2.1% year over year

• Median household income: $149,811
• Median sale price: $745,000
• Median rent price: Unavailable
• Income needed to afford median-priced home: $197,357
• Share of income needed to afford a typical home: 39.5%
• Cost of living: 49% higher than the national average

Nassau County is a large area in central Long Island that includes many historic cities like Hempstead and Massapequa. Home to colonial architecture, quiet streets, sandy beaches, and bustling downtowns, it’s no wonder locals love to live in the area. 

Unfortunately, the cost of living in Nassau County has become simply out of reach for many, as competition for a very limited supply of housing has pushed costs to unaffordable levels. Add in high auxiliary costs like property taxes, and residents are grappling with serious expenses. Now, the area is the tenth-most expensive housing market in the nation.

Nassau County homes for sale | Nassau County houses for rent | Nassau County apartments for rent

Why is housing so expensive?

There are three primary factors behind today’s high house prices:

1. Limited housing supply
2. Strict zoning laws
3. Investor market share

While zoning laws and investor market share play a role in today’s house prices, the largest driver is a chronic inventory shortage. There aren’t enough homes for people who want them, and not enough homebuilding to meet demand. 

This pattern began during the Great Recession and was exacerbated during the pandemic homebuying frenzy, when homebuyers capitalized on ultra-low mortgage rates. Today, limited demand has put a lid on price growth, but it will take years before costs return to “normal.” 

>> Read: Why Are Houses So Expensive?

Methodology

Rankings are based on an April 2026 Redfin analysis of housing affordability across the 50 largest U.S. core-based statistical areas (“cities,” ”metros”).  The analysis ranked cities on the share of home listings that were unaffordable to someone earning the area’s median income. A home was considered “unaffordable” if its corresponding monthly payment was more than 30% of median monthly earnings, assuming a 20% down payment, typical taxes and fees, and a 30-year mortgage. 

All housing data came from a Redfin analysis of MLS and U.S. Census data. Rental data came from Zillow. Cost-of-living data came from The Cost of Living Index (COLI) from the Council for Community and Economic Research. Cost of living in Anaheim used Orange County data.

Key Insights

• Target the “43% ceiling”: Your Debt-to-Income (DTI) ratio is one of the most powerful levers you have; lowering your monthly debt payments directly expands your home-buying budget.
• Prioritize “bad” debt: Focus your cash on high-interest revolving accounts (like credit cards) to boost your credit score and secure a lower mortgage rate simultaneously.
• Strategy over total liquidation: You don’t need to be debt-free to buy. Success lies in balancing debt repayment with your down payment to maximize your overall purchasing power.

The dream of homeownership often feels like it’s in a tug-of-war with the reality of monthly bills, student loans, and credit card balances. Deciding whether to clear your financial slate or dive straight into the housing market is a pivotal choice that affects your mortgage rate, your budget, and your long-term peace of mind.

Whether you’re searching for a home in Seattle, WA, Denver, CO, or Orlando, FL, this Redfin guide will walk you through the essential question—should I pay off debt before buying a house—and help you determine the best path for your unique financial situation.

Understanding the “debt-to-income” factor

When determining if you should pay off debt before buying, the answer often lies in how lenders view your monthly obligations. Adi Pavlovic, CEO and Co-founder of Newzip, explains that the strategy isn’t about hitting a zero balance, but rather hitting a specific target:

“Lenders want to see your monthly debt below 43% of your gross income. For most buyers, strategically paying down high-interest debt before applying is the most meaningful way to improve your ability to qualify for a loan and maximize your purchasing power. It’s not about being debt-free; it’s about having good debt vs bad debt.”

This strategy works because it directly addresses the two most important factors in your mortgage application:

• The 43% “ceiling”: This is the standard Debt-to-Income (DTI) ratio limit. It represents the percentage of your gross monthly income used to pay debts. As Pavlovic notes, staying below this mark is the key to qualifying.
• Good debt vs. bad debt: Lenders distinguish between “bad debt” (high-interest revolving accounts like credit cards) and “good debt” (manageable installment loans).
• Maximizing purchasing power: By eliminating high-interest monthly payments, you “free up” more of your income. You can use a mortgage calculator to see exactly how your monthly debts impact your potential home price.

Boosting your credit score for better rates

Your debt levels directly influence your credit score, specifically through “credit utilization.” A common rule of thumb is to keep credit utilization below 30%, but it is not a magic cutoff. In general, lower utilization is better for FICO scores, and very low utilization may be better than simply staying under 30%. 

A higher credit score doesn’t just help you get approved; it saves you thousands of dollars over the life of the loan by securing a lower interest rate. If you aren’t sure where you stand, check out this guide on what credit score is needed to buy a house. If high revolving balances are hurting your credit score, paying them down is often one of the most effective moves before applying for a mortgage. Before making large payments or closing accounts, check with your lender. .

Balancing debt repayment with your down payment

One of the biggest hurdles is deciding where to put your extra cash. Should you pay off a $10,000 loan or save that $10,000 for a down payment?

This is where financial advisors and personal finance blogs often weigh in on the “opportunity cost.” If the interest rate on your debt is 20% (credit cards) and the mortgage rate is 7%, it makes sense to kill the high-interest debt first. However, if you are looking at a 3% student loan, that cash might be better served as a down payment to avoid Private Mortgage Insurance (PMI).

Utilizing down payment assistance programs

If you decide that paying off debt is your priority, you might worry that your down payment fund will disappear. This is where down payment assistance programs come into play. Many state and local programs offer grants or low-interest second mortgages to help first-time buyers.

By using a DPA program, you can focus your liquid savings on eliminating high-interest debt to improve your DTI, while still having the funds necessary to close on a home.

When it makes sense to buy with debt

There are scenarios where you might choose not to wait. If you live in a rapidly appreciating market, the cost of waiting a year to pay off debt might exceed the amount of debt you actually pay off. Furthermore, if your debt consists of low-interest installment loans and your DTI is already low, you may already be in a prime position to buy.

Deciding what is right for you

Ultimately, the answer to “should I pay off debt before buying a house” depends on your DTI, your credit score, and your local market conditions. If your debt is high-interest or pushing your monthly obligations past the 43% mark, focusing on repayment will likely put you in a much stronger position to secure a favorable mortgage. On the other hand, if your debt is manageable and your credit is strong, your “debt” might just be a small footnote in your homebuying journey.

FAQ: Should you pay off debt before buying a home?

1. Which debt should I tackle first?

Focus on revolving debt like credit cards. They carry the highest interest rates and heavily weigh down your credit score. Installment debt, such as auto or student loans, is viewed more leniently by lenders as long as the monthly payment fits your budget.

2. Can I buy a home with high student loan balances? 

Yes, you can buy with student loans, but the way your payment is counted depends on the loan program and documentation. Lenders may use your actual documented payment or a program-specific formula for deferred or $0-payment loans. 

3. Will paying off a loan hurt my credit score? 

It’s possible. Closing an account can sometimes cause a temporary dip in your score. If you are within 90 days of a mortgage application, always consult your lender before making large lump-sum payments or closing old accounts.

4. How much should I keep for emergencies? 

Aim for 3–6 months of living expenses kept entirely separate from your down payment. Buying a home with zero liquid savings is a high-risk move that leaves you vulnerable to the “hidden costs” of homeownership, like emergency repairs.

5. Does 0% interest debt count against me? 

Yes. Even at 0% interest, the monthly payment is a liability. A $500 monthly furniture or car payment still consumes your “purchasing power” and reduces the total mortgage amount a lender will approve.

Key takeaways

• Detroit, Pittsburgh, and St. Louis are the most affordable cities in the U.S., balancing relatively high incomes and low housing costs.
• The Midwest and Northeast are home to all of the cheapest places to live—although they are also becoming increasingly competitive.
• Home prices are still rising in many parts of the country, but slower growth is helping affordability improve in some markets.

Housing affordability remains one of the biggest challenges for Americans in 2026. Home prices grew exponentially during the pandemic housing boom, and while price growth has since slowed, a majority of people are still spending an outsized share of their income on housing. In fact, the typical homebuyer today spends about 40% of their income on monthly housing payments—well above the traditional affordability benchmark. 

Still, some cities are far more affordable than others. In many Midwest and Northeast metros, lower home prices and relatively strong local incomes keep homeownership within reach.

So, which U.S. cities are still affordable, and where is affordability improving? Let’s take a look at the most affordable places to live in and buy a house in 2026—where housing remains reasonably priced and the cost of living is more manageable.

 

The 10 most affordable cities in the U.S.

1. Detroit, MI

77.5% of homes affordable on area’s median income | +5.5% year over year

• Median household income: $65,687
• Median sale price: $211,000
• Median rent price: $1,200 
• Income needed to afford median-priced home: $51,489
• Share of income needed to afford a typical home: 23.5%
• Cost of living: 1% lower than the national average

Detroit, the automobile mecca turned comeback city, is the most affordable city in the U.S. It’s so affordable largely because it’s still recovering from decades of  economic and population decline, which culminated in bankruptcy in 2013. 

Today, rent and house prices are far below national rates, and the typical salary generously covers the standard monthly housing payment. Affordability improved in the last year, but house prices are now climbing as demand rises. 

Detroit homes for sale | Detroit houses for rent | Detroit apartments for rent

2. St. Louis, MO

66.9% of homes affordable on area’s median income | +6.4% year over year

• Median household income: $88,593
• Median sale price: $282,600
• Median rent price: $1,245
• Income needed to afford median-priced home: $71,407
• Share of income needed to afford a typical home: 24.2%
• Cost of living: 11% lower than the national average

St. Louis sits in a sweet spot for big-city living without the steep price tag. You can catch a Cardinals game at Busch Stadium, tour craft breweries, or explore an arts scene spanning the Delmar Loop to Grand Center. 

But what really hooks newcomers is St. Louis’s Midwest friendliness and affordability. The city has an especially low cost of living, with housing, healthcare, everyday errands, and nights on the town all running 7-21% below the national average. 

St. Louis homes for sale | St. Louis houses for rent | St. Louis apartments for rent

3. Pittsburgh, PA

64.8% of homes affordable on area’s median income | +1.2% year over year

• Median household income: $83,419
• Median sale price: $265,000
• Median rent price: $1,525
• Income needed to afford median-priced home: $67,470
• Share of income needed to afford a typical home: 24.3%
• Cost of living: 8% lower than the national average

Pittsburgh is the best place to live in Pennsylvania for a reason. Once defined by steel mills, it’s now home to cutting-edge tech companies and a growing population—while remaining the third-cheapest housing market in the country. 

In recent years, Pittsburgh has gotten more expensive as demand for lower-cost housing eats away at the city’s supply. Still, the Steel City is far more affordable than most places in the U.S., and is a great option for those looking for more space and lower housing costs than nearby East Coast cities.

Pittsburgh homes for sale | Pittsburgh houses for rent | Pittsburgh apartments for rent

4. Cleveland, OH

62.7% of homes affordable on area’s median income | +3.6% year over year

• Median household income: $78,519
• Median sale price: $255,000
• Median rent price: $1,225
• Income needed to afford median-priced home: $67,545
• Share of income needed to afford a typical home: 25.8%
• Cost of living: 7% lower than the national average

Cleveland is shedding its Rust Belt image, boasting an economy powered by healthcare, tech, and finance—and housing that won’t sink your budget. Whether it’s a revitalized Victorian in Ohio City or a modern loft near Lake Erie, Cleveland’s housing market is hard to beat. Combined with a low cost of living and solid median income, it’s clear why Cleveland is among the most affordable cities in the U.S.

Cleveland homes for sale | Cleveland houses for rent | Cleveland apartments for rent

5. Warren, MI

61.3% of homes affordable on area’s median income | +7.7% year over year

• Median household income: $96,676
• Median sale price: $325,000
• Median rent price: $1,400
• Income needed to afford median-priced home: $79,594
• Share of income needed to afford a typical home: 24.7%
• Cost of living: 1% lower than the national average

Just north of Detroit, Warren might not get the same buzz as its big-city neighbor. But, with relatively affordable housing, above-average incomes, and plenty of attractions, there’s a reason the city is more popular than most in Michigan. 

Like Detroit, Warren experienced a significant decline in the 2000s-2010s, leaving many homes empty and a downtown in need of refresh. But thanks to a concerted effort to bring the automobile industry back to the area—with a focus on EVs—the city has started on a new path of revitalization. As part of its efforts, Warren is pushing to build its own downtown. 

Warren homes for sale | Warren houses for rent | Warren apartments for rent

6. Baltimore, MD

60.9% of homes affordable on area’s median income | +4.2% year over year

• Median household income: $112,328
• Median sale price: $399,000
• Median rent price: $1,650
• Income needed to afford median-priced home: $99,471
• Share of income needed to afford a typical home: 26.6%
• Cost of living: Similar to the national average

Baltimore could be the perfect fit for those looking for lower-cost housing in a bustling East Coast metro. Traditional row houses in neighborhoods like Canton or Federal Hill still come at manageable prices, and the revitalized waterfront buzzes with fresh dining and entertainment options.

Compared to nearby East Coast cities like Washington, D.C. and Philadelphia, Baltimore buyers can often get more space for less money.

Baltimore homes for sale | Baltimore houses for rent | Baltimore apartments for rent

7. Indianapolis, IN

60.9% of homes affordable on area’s median income | +4.8% year over year

• Median household income: $90,927
• Median sale price: $315,000
• Median rent price: $1,500
• Income needed to afford median-priced home: $79,398
• Share of income needed to afford a typical home: 26.2%
• Cost of living: 10% lower than the national average

Indianapolis is an attractive choice for those seeking urban life without the high price tag. Local wages generally surpass what’s needed to afford a typical monthly house payment. Plus lower-than-average grocery and utility costs help make Indy among the most affordable places to live and buy a house.

However, like nearly every city in America, housing affordability has declined for Indianapolis’ lower income population, as economic struggles weigh on the more vulnerable.

Indianapolis homes for sale | Indianapolis houses for rent | Indianapolis apartments for rent

8. Cincinnati, OH

55.6% of homes affordable on area’s median income | +1.3% year over year

• Median household income: $89,002
• Median sale price: $313,000
• Median rent price: $1,410
• Income needed to afford median-priced home: $78,598
• Share of income needed to afford a typical home: 26.5%
• Cost of living: 3% lower than the national average

Cincinnati may be a former Rust Belt city, but today it’s an affordable metro embracing growth and modernization. Revitalization plays a large role in residents’ lives, as the city pushes to improve infrastructure and spur economic growth. Today, Cincy is the leading employment hub in Ohio.

Beyond economics, the recently-completed Over-the-Rhine project transformed Cincinnati’s downtown into a shopping and entertainment destination, while the Ohio Riverfront gained a hip new neighborhood, called The Banks. 

Cincinnati homes for sale | Cincinnati houses for rent | Cincinnati apartments for rent

9. Chicago, IL

55.1% of homes affordable on area’s median income | +13.4% year over year

• Median household income: $98,502
• Median sale price: $390,000
• Median rent price: $2,045
• Income needed to afford median-priced home: $92,332
• Share of income needed to afford a typical home: 28.1%
• Cost of living: 18% higher than the national average

Chicago’s sprawling footprint is home to everything from world-famous art, to iconic skyscrapers, to quaint lakeside parks. But, because of its size, the cost of living varies widely depending on where you live. House prices reach into the millions in neighborhoods like Winnetka and Gold Coast, for example, while Avalon Park and Cottage Grove Heights are much more affordable. 

Regardless, strong median incomes and home prices that are relatively low for a major metro are how  Chicago earned its number nine spot. 

Chicago homes for sale | Chicago houses for rent | Baltimore apartments for rent

10. Minneapolis, MN

54.7% of homes affordable on area’s median income | +6.1% year over year

• Median household income: $108,714
• Median sale price: $393,000
• Median rent price: $1,645
• Income needed to afford median-priced home: $99,025
• Share of income needed to afford a typical home: 27.3%
• Cost of living: 8% lower than the national average

Minneapolis is among the most walkable and bikeable cities in the U.S., but it also stands out for its affordability. Buoyed by a wide variety of major employers, above-average median incomes, and an array of housing options in neighborhoods like Bryn-Mawr and Phillips, it’s not a major challenge finding a home within budget.  

Minneapolis homes for sale | Minneapolis houses for rent | Minneapolis apartments for rent

Why is the Midwest so affordable?

The Midwest and Northeast are home to a majority of the most affordable housing markets in the U.S., with most clustered around the Great Lakes. These areas remain relatively affordable in large part because of their economic past. Decades of industrial decline from the 1960s through the 2010s dampened home values and slowed population growth, leading many to be labeled “Rust Belt” cities. 

However, as affordability has become increasingly strained nationwide, many homebuyers are now flocking to these once-overlooked metros in search of lower-cost options. This shift has led to a surge in demand and renewed momentum for revitalization efforts. But with demand rising against a limited and aging housing supply, prices are now climbing faster than the national average.

How much home can you afford?

Experts generally suggest spending less than 30% of your income on housing, but in today’s market, most households spend more than that. 

Regardless, it’s important to determine how much home you can afford. Here are a few tools to help:

If you decide you’re ready to enter the market, make sure to get pre-approved for a mortgage to get the ball rolling smoothly.

>> Looking for more affordable options? Check out the cheapest states to buy a house or cities that pay you to move there. 

Methodology

Rankings are based on an April 2026 Redfin analysis of housing affordability across the 50 largest U.S. core-based statistical areas (“cities,” ”metros”). The analysis focused on the share of active listings that are affordable to someone earning the area’s median income. A home was considered “affordable” if its corresponding monthly payment was no more than 30% of median monthly earnings, assuming a 20% down payment, typical taxes and fees, and a 30-year mortgage. Cities with the highest share of affordable listings ranked as the most affordable.

All housing data came from a Redfin analysis of MLS and U.S. Census data. Rental data came from Zillow. Cost-of-living data came from The Cost of Living Index (COLI) from the Council for Community and Economic Research. Detroit’s cost of living was also used for Warren due to insufficient data.

Buying a home is exciting, but it’s also easy to get distracted by stylish kitchens, fresh paint colors, and picture-perfect staging. Many buyers don’t realize what homebuyers overlook until after they’ve moved in and are dealing with cramped storage, outdated systems, or a layout that doesn’t quite fit their daily routine. Taking a closer look at the practical details before buying can help you avoid costly surprises and feel more confident in your decision.

In this Redfin guide, we’ll break down some of the most common things buyers overlook when choosing a house and how to avoid them. Whether you’re looking for more space in Raleigh, NC or downsizing in Sarasota, FL, these expert insights can help you focus on the features that matter most long after the excitement of closing day fades.

In this article:
1. Prioritizing cosmetic updates over functional space
2. Not considering long-term maintenance costs
3. Failing to separate must-haves from nice-to-haves
4. Overlooking storage and lifestyle-specific space needs
5. Not factoring in how the home will actually feel to live in every day
6. Ignoring the condition of major home systems
What homebuyers overlook and how to avoid costly regret

1. Prioritizing cosmetic updates over functional space

It’s easy to fall in love with trendy kitchens, fresh paint colors, and beautifully staged rooms during a home tour. But while cosmetic updates can usually be changed over time, a home’s layout and square footage are much harder – and often much more expensive – to fix later on.

“When buying a home, it’s usually more cost-effective to choose a house with enough space already built in, even if it needs cosmetic updates,” recommends David Perrotti, owner of Fine Home Contracting. “Additions can get expensive quickly, so finding the right-sized home with room to remodel later is often the smarter long-term move.”

A home with outdated finishes but a functional layout may ultimately serve you better than a beautifully updated house that feels cramped or lacks flexibility.

How to avoid it:

• Focus on layout and functionality before finishes and decor.
• Think about how your needs may change over the next several years.
• Consider whether the home has enough bedrooms, storage, and flexible space.
• Remember that cosmetic updates are usually easier and less expensive than additions.
• Picture the home empty rather than fully staged to better evaluate the space itself.

2. Not considering long-term maintenance costs

The cost of buying a home goes far beyond the monthly mortgage payment. Many buyers focus heavily on the purchase price while underestimating the ongoing maintenance and repair costs that come with homeownership, especially in older homes or properties with aging systems.

Even small repairs can add up quickly over time, and larger expenses like replacing a roof, HVAC system, or water heater can catch homeowners off guard if they’re unprepared. A home that looks move-in ready on the surface may still require significant upkeep behind the scenes.

How to avoid it:

• Ask about the age and condition of major systems like the roof, HVAC, plumbing, and water heater.
• Budget for routine maintenance in addition to your monthly housing costs.
• Review inspection reports carefully and pay attention to recommended repairs.
• Consider the long-term upkeep of landscaping, pools, decks, or large yards.
• Avoid spending your entire budget on the purchase price alone so you have room for unexpected repairs.

3. Failing to separate must-haves from nice-to-haves

It’s easy to get swept up in dream-home features during the buying process, especially when scrolling through listings filled with luxury upgrades and trendy finishes. But without a clear understanding of what you truly need versus what would simply be nice to have, buyers can end up compromising on functionality for features that may matter less over time.

“When planning a new home, it’s important to separate your must-haves from your nice-to-haves,” says Joan Masarate, project support at Advanced Construction. “We help homeowners prioritize both, making sure the essentials are done right while incorporating the details that make the space feel like home. The result is a well-balanced design that supports your lifestyle today and into the future.”

A stylish kitchen or spa-like bathroom may be appealing, but practical features like location, layout, storage, and bedroom count often have a greater impact on your everyday experience.

How to avoid it:

• Make a list of non-negotiable features before house hunting.
• Separate functional needs from aesthetic preferences.
• Think about how the home will support your daily routine and future plans.
• Stay flexible on cosmetic details that can be updated later.
• Revisit your priorities regularly to avoid getting distracted by trendy upgrades.

>> Read: Balancing Wants vs. Needs in Your First Home

4. Overlooking storage and lifestyle-specific space needs

Storage is one of the most commonly underestimated features during the homebuying process. A house may look spacious during a showing, but once furniture, seasonal items, hobbies, pets, and everyday clutter move in, buyers often realize the home doesn’t function as well as they expected.

“When searching for a new home, it’s important to consider storage through the lens of your actual lifestyle,” states Grace Hall at Grace to Organize. “Many people underestimate how much they own until after they move, so taking inventory before house hunting can help you choose a home that truly fits your needs. It’s also helpful to list out the specific spaces you’ll need – like areas for a desk, dog crate, or hobbies – so nothing gets overlooked.”

How to avoid it:

• Take inventory of what you own before starting your home search.
• Consider storage beyond closets, including garages, pantries, and utility rooms.
• Think about space for hobbies, pets, sports equipment, or working from home.
• Picture where everyday items will go, like backpacks, shoes, and mail.
• Make a list of lifestyle-specific needs before touring homes so important details don’t get missed.

5. Not factoring in how the home will actually feel to live in every day

A home can look perfect during a quick showing but feel completely different once you’re living in it full time. Many buyers focus so much on finishes and square footage that they forget to think through how the home will function during everyday routines, from busy mornings to quiet evenings at home.

Even a beautifully updated home may not feel right if the layout feels cramped, the lighting is poor, or the home doesn’t match your daily habits.

How to avoid it:

• Visit the home at different times of day if possible to notice lighting and noise changes.
• Walk through your typical daily routines while touring the space.
• Pay attention to how rooms connect and whether the layout feels functional.
• Look beyond staging and imagine the home completely empty.
• Consider things like privacy, sound transfer, and how shared spaces will function long term.

6. Ignoring the condition of major home systems

It’s easy to focus on cosmetic details during a home tour, but the systems behind the walls are often far more important – and expensive. HVAC, plumbing, electrical, and water systems all play a major role in your home’s comfort, safety, and long-term maintenance costs, yet many buyers don’t think much about them until something stops working.

“For first-time homebuyers, taking care of your HVAC and plumbing systems is an important part of creating a safe and comfortable home for your family,” suggests Ryan at Beltway Air Conditioning, Heating, & Plumbing. “An HVAC tune-up allows a trained technician to walk you through how your system works, share simple maintenance tips like regularly changing a dirty air filter, one of the top causes of breakdowns and help prevent unexpected issues.”

Ryan goes on to share, “A plumbing inspection can also locate and evaluate your main water shut-off valve, so you’re prepared to quickly protect your home if a problem arises. These small steps go a long way in keeping your home running smoothly and giving your family peace of mind.”

How to avoid it:

• Ask about the age and maintenance history of the HVAC, plumbing, and water heater.
• Schedule inspections beyond the standard home inspection when needed.
• Learn where important shut-off valves and system controls are located.
• Ask sellers about recent repairs or recurring maintenance issues.
• Budget for future replacements and ongoing maintenance costs.

What homebuyers overlook and how to avoid costly regret

Choosing a home is about more than finding a space that looks good during a showing, it’s about finding one that works well for your everyday life. By paying attention to commonly overlooked details like storage, layout, maintenance needs, and long-term functionality, buyers can make more informed decisions and avoid regrets after move-in. Taking the time to think practically now can help ensure your next home feels comfortable, functional, and right for years to come.