America's Most Affordable Cities 2014

Forbes
America's Most Affordable Cities 2014

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By Erin Carlyle, Forbes

Perhaps surprising to some, the state of New York is home not only the nation's most overpriced city (New York City ties with Honolulu for the dubious honor), but also its most affordable: Buffalo. With a median family income of $63,500 and a median home sales price of $100,000, home ownership is attainable for 88.5% of the local population. Coupled with daily expenses that are about 4% below the national median, Buffalo claims the No. 1 spot on our list.

Seven Southern cities are on the list, too. But the Midwest dominates when it comes to affordability.

Three hotbeds of affordability are situated in the Northeast. Surprisingly, none of America’s Most Affordable Cities are in the nation’s West.

Click on the photo above to see America's Most Affordable Cities.

And to see the nation's most overpriced cities, visit Forbes.com:

Behind the numbers

To find America's Most Affordable Cities, we started with the 100 largest Metropolitan Statistical Areas (MSAs) and Metropolitan Divisions (MDs), all with populations of 600,000 or more. MSAs and MDs are cities and their surrounding suburbs as defined by the Office of Management and Budget.

First we looked at housing affordability, using the Housing Opportunity Index (HOI) from the National Association of Home Builders and Wells Fargo. The quarterly index weighs median prices for homes sold against median income levels to determine the percentage of homes that are affordable to residents making the median income (the national median is $64,400). Due to a lack of sufficient data, Baton Rouge and New Orleans, La., as well as Columbia, S.C.; Gary and Indianapolis, Ind.; Kansas City, Mo.; Little Rock, Ark.; Nashville, Tenn.; and Omaha, Neb. had to be excluded from our results.

Next we considered the cost-of-living index developed by Sperling’s Best Places, factoring in the cost of food, utilities, gas, transportation, medical expenses, and a host of other daily expenses for each area. Cities with a cost-of-living rank above 100 have higher prices for these day-to-day goods than the national average.

Finally, we weighted these factors, in line with the methodology the Bureau of Labor Statistics uses for the weightings of its Consumer Price Index (where housing is weighted just under 32%). Because housing is such an important expense to most people, we tipped the scales a bit higher.

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