Owning a home is a key component of the American Dream. Homeownership allows Americans to create stability and, arguably, build wealth. Unfortunately, many renters currently face challenges getting into a house. Rising prices and stubbornly high interest rates have made buying a house more expensive for most.
Compounding the problem is a reduced inventory of available houses, leaving fewer homes for prospective buyers to consider. Although inventory is growing, it’s still lagging in much of the country, according to the National Association of REALTORS.
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Finding the right city in which to buy a house is essential for many renters. A recent study from Rocket Moving highlights the top cities for renters to purchase a home. The study looks at the average home price, median down payment, 15-year mortgage rate, homeownership rate and mortgage approval rate to identify the top ten cities where renters can afford to buy a house.
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Des Moines, Iowa
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Average home price: $226,800
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Median down payment: $26,500
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15-year mortgage rate: 4.84%
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Homeownership rate: 71.8%
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Mortgage approval rate: 68.7%
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Composite score: 99.4
Minneapolis, Minnesota
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Average home price: $346,700
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Median down payment: $38,500
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15-year mortgage rate: 5%
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Homeownership rate: 74%
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Mortgage approval rate: 65.8%
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Composite score: 96.9
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Indianapolis, Indiana
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Average home price: $245,500
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Median down payment: $17,500
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15-year mortgage rate: 4.94%
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Homeownership rate: 73.3%
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Mortgage approval rate: 60.9%
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Composite score: 92.6
Morgantown, West Virginia
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Average home price: $168,200
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Median down payment: $6,600
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15-year mortgage rate: 5%
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Homeownership rate: 77%
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Mortgage approval rate: 54%
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Composite score: 89.4
Charleston, South Carolina
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Average home price: $301,800
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Median down payment: $24,400
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15-year mortgage rate: 4.99%
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Homeownership rate: 73%
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Mortgage approval rate: 53.4%
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Composite score: 88.0
Fargo, North Dakota
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Average home price: $268,600
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Median down payment: $24,500
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15-year mortgage rate: 4.96%
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Homeownership rate: 65.7%
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Mortgage approval rate: 68.8%
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Composite score: 86.0
Huntsville, Alabama
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Average home price: $228,300
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Median down payment: $8,800
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15-year mortgage rate: 4.91%
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Homeownership rate: 73.8%
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Mortgage approval rate: 53.5%
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Composite score: 83.1
Pittsburgh, Pennsylvania
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Average home price: $271,900
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Median down payment: $25,400
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15-year mortgage rate: 4.86%
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Homeownership rate: 71%
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Mortgage approval rate: 61.4%
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Composite score: 82.9
Grand Rapids, Michigan
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Average home price: $249,900
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Median down payment: $23,200
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15-year mortgage rate: 4.86%
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Homeownership rate: 74.1%
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Mortgage approval rate: 61.3%
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Composite score: 81.8
Kansas City, Missouri
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Average home price: $252,400
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Median down payment: $17,800
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15-year mortgage rate: 4.9%
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Homeownership rate: 68.7%
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Mortgage approval rate: 60%
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Composite score: 80.7
The Bottom Line
Transitioning from renting to buying a house is challenging in the current economy, but it is achievable.
“A lot of renters assume buying a home is out of reach, but that depends entirely on where you’re looking,” said Christopher Vardanyan, CEO at Rocket Moving. “In some cities, the difference between renting and owning comes down to a few thousand dollars and slightly better loan odds. That’s a much shorter leap than people think, especially when you compare it to cities where both the down payment and mortgage approval chances are working against you.”
With planning and an opportunistic eye, buying a house is possible.
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This article originally appeared on GOBankingRates.com: 10 Cities Where Renters Can Finally Afford To Buy a Home in 2025