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Toledo’s average price per square foot is similarly low relative to national figures. Recent data shows that the average price per square foot is $90 for single-family homes, meaning that $400,000 would buy you a 4,444-square-foot home. Some homebuyers are using their home equity to buy new homes in lower-priced areas instead of financing, to avoid an 8% mortgage rate, said Fairweather.
Salt Lake City, UT
More than half of the homes there are single-family, with the average price per square foot at $884. Homes in the $200,000 to $300,000 price range in Green Bay typically come with three bedrooms and one or two bathrooms, with around 1,400 to 2,000 square feet or more. You’ll often find large, well-managed lawns with finished basements and updated kitchens and bathrooms. It’s the only way to know how much you can afford to spend on a house. Information in this market report was obtained from the Intermountain MLS (IMLS) on August 7th, 2019.
Fremont, California
In the next section, we’ll go over the different types of low-down-payment mortgages. If you get a “conforming loan,” which conforms to Fannie Mae and Freddie Mac’s rules, you can stop paying your premiums when your mortgage balance dips to 80% of your home’s market value. In fact, your loan servicer will automatically cancel your PMI once the balance reaches 78 percent of the original value.
Fort Wayne, Indiana
The median sales price on single-family houses in Pittsburgh is $225,900. Many current home listings boast charming exteriors, renovated interiors, and extra backyard amenities such as decks and fish ponds. Just a few homes look bad enough to require updates before moving in.
In some markets $400K may get you a modest cottage, if that, while in others it can buy a veritable mansion. Let’s see how the 28/36 rule checks out using the income determined above of $105,864 per year. Dividing by 12, that breaks down to $8,822 per month, and 28 percent of $8,822 is about $2,470. So that would be the limit of what you should spend on housing — meaning $105,864 is the minimum income you’d need to comfortably afford that $400,000 home purchase.
Your minimum down payment for a $400K house with an FHA loan can be $14,000. Your minimum down payment for a $400K house with a conforming loan can be as low as $12,000. If the federal government isn’t backing (partly guaranteeing) a loan, it’s called a conventional mortgage. You’ll discover the premium you’ll pay in the loan estimates (quotes) you’ll receive from lenders when you comparison shop for your mortgage.
Buying in the priciest two metros would require salaries of more than $400,000. Redfin analyzed median monthly mortgage payments in August 2023 and August 2022. As home prices and interest rates rise, would-be homebuyers need a salary of $114,627 to afford a median-priced house in the U.S., according to a recent report by real estate site Redfin. A mortgage preapproval is a letter from a lender that shows how much you can borrow, based on details like your credit history, income, cash reserves and other debts. When you approach a lender for a preapproval, they’ll perform a hard credit check and review your financial documents to gain a clear picture of your financial standing. This information helps you set a home-buying budget before you start looking at homes.
The sole exception is for those with VA loans, which don’t do continuing mortgage insurance. The monthly mortgage payment on a $400,000 home can also vary significantly. For instance, your loan type (variable versus fixed rate), down payment amount, property taxes, homeowners insurance, and interest rate will all have an impact on your monthly payment. Even though it’s often recommended that homebuyers put down at least 20% on a home purchase, the typical down payment for first-time homebuyers is closer to 7%. Keep in mind that when putting down less than 20% on a conventional mortgage, you’ll need to pay private mortgage insurance (PMI) until you accumulate 20% equity in the home. Bankrate.com is an independent, advertising-supported publisher and comparison service.
Irvine, California
If you are in an eligible military-related group and can overcome that credit score obstacle, you’re in an excellent position to buy a home. Interest rates are another major piece of the housing affordability puzzle. Since March 2022, the Fed has increased the federal funds rate 11 times. These rate hikes, in turn, have driven up the cost of consumer borrowing, including mortgages. This is a lower down payment option that may be suitable for buyers who want to purchase the property sooner with a smaller initial cash requirement. Situated on the western tip of Lake Erie, Ohio’s Toledo ranks second for cities where $400,000 goes the furthest regarding home purchases.
This can help you better estimate your payments using a mortgage calculator. Once you find a property, you can ask your lender about locking your mortgage rate. You’ll need a down payment of $12,000, or 3 percent, if you’re buying a $400K house with a conventional loan. Meanwhile, an FHA loan requires a slightly higher down payment of $14,000, equivalent to 3.5 percent of the purchase price.
These loans provide the money to buy a home along with funds to rehabilitate the property. Some of Abilene’s best features include above-average schools, plenty of parks, and are a three- to four-hour drive to Dallas and Austin, respectively. The employment situation here needs work, according to Niche, but Abilene generally scores well in diversity, weather and commute lengths. The Midwest also scored highest on NAR’s Affordability Index, which measures whether a typical family earns enough income to qualify for a mortgage in that region. Just go to our home page and scroll down to our suite of mortgage tools.
Many focus on first-time buyers and people on low-to-moderate incomes. So, if you can comfortably afford a 20% down payment, you should probably make one. And, as mentioned above, they’re designed for people with moderate and low incomes who wish to buy a home in an area designated as rural.
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This is a lower down payment option, but it may lead to higher monthly mortgage payments and the need for private mortgage insurance (PMI). In Orange County, Irvine ranks as the fourth city where $400,000 buys the least. Many of the city’s 309,000 residents own expensive homes, with a median home value of $970,500. With that, the average price per square foot is $721, more than three times the national average.
If you’re looking for a place to buy the cheapest homes, your best bet is a city in the Midwest. This region had the lowest median sales price—$301,800—among all regions in the U.S. during the second quarter of 2023, according to NAR. We sorted through the data to find five affordable cities where you can buy a single-family house for under $300,000. The mortgage calculator will tell you your likely monthly mortgage payment. You’ll get only a rough guide and must wait for your mortgage quotes for more accurate figures.
Employment is on an upward trend, though NAR’s report notes it needs improvement. Niche grades each city based on 12 factors, such as public schools, jobs, outdoor activities, diversity and nightlife. Fort Wayne received a B or higher in all of them except crime and safety, which earned a C.
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