17 American cities where home prices are skyrocketing — but houses are still affordable

Sellers rejoice.Justin Sullivan/Getty Images

Homebuyer demand is surging in many markets across the US, sending home prices skyward.

Even though the number of home sales are slightly down this summer, the national median home price rose 6.5% year-over-year to an all-time high of $263,800 in June, according to the National Association of Realtors (NAR).

“The demand for buying a home is as strong as it has been since before the Great Recession,” said NAR chief economist Lawrence Yun.

“Listings in the affordable price range continue to be scooped up rapidly,” he said, “but the severe housing shortages inflicting many markets are keeping a large segment of would-be buyers on the sidelines.”

In a new report, GOBankingRates examined home prices for the 100 most populous markets using Zillow data, comparing prices in each market for June 2016 and June 2017.

Overall, 19 cities saw a median home price increase of more than 14% in the last year, and an average increase of nearly 30% over the last two years. With this data, we checked out whether these markets are still affordable for homebuyers in spite of surging prices.

To calculate affordability, we applied the standard measure of housing affordability — 30% or less of pre-tax income — to the median home price. We used Sperling’s Best Places data for median household income for each city and assumed a 20% down payment and 4% fixed rate 30-year mortgage.

With the notable exceptions of New York City and Seattle, all of these cities remain affordable markets. That’s a win-win for buyers and sellers.

Read on for the full list, which is dominated by markets in the South and the Midwest.