How much house can you afford with $150K?
Owning your own home has long been, and still remains, the American dream. For many though, the price of purchasing that first starter home seems out of reach. While that may be true in some areas, there are a number of cities and towns across the country where a buyer can still get quite a bit of home for under $150,000. The key is to do your homework and conduct a thorough property search to find a dream home you can afford.
When starting your search, keep in mind that the amount of your monthly payment on a $150,000 home will depend on a variety of factors such as the amount you will pay for your down payment, the interest rate on your mortgage, and the tax rate of where you purchase the home; however, given the average interest rates at the beginning of 2013, a modest down payment, and an average tax rate, your monthly payment would likely run around $1,000—a figure that is within reach of lower to moderate income families trying to get into a starter home.
As a general rule, “starter” homes will cost about 30 percent less than the median home price for the area in question. Therefore, if you are looking for a starter home in the $150,000 price range, you want to conduct your property search in locations where the median home price is around $215,000. Consider the following three cities where a search of the available property listings is likely to show numerous options for three to four bedroom homes in the $150,000 or less price range:
- Kansas City, Missouri – if you are looking for Midwest living in a metropolitan city that still retains its small town feel, then Kansas City, Missouri may be the city for you. With a population of over two million people, residents of Kansas City can find culture, shopping, and dining to suit any taste and budget. At the same time, Kansas City is home to a diverse population with neighborhoods that reflect diversity. Both modern, urban high rise living as well as upper income luxury homes can be found in Kansas City; however, the majority of the housing options in Kansas City are moderate income single family homes. As of 2013, numerous neighborhoods within Kansas City offer home prices well under the $150,000 price point.
- Rochester, New York—located just south of Lake Ontario, Rochester, New York is home to just over 200,000 people; however, it is also part of a larger metropolitan area that includes over one million residents. Rochester’s location makes it an excellent opportunity to experience small town living without losing all the comforts of a big city. In addition, its proximity to Lake Ontario offers numerous opportunities for water activities during the warmer months. Even median home prices in Rochester are under $150,000, making it an ideal place to search property listings for an affordable home. Although there are some urban housing opportunities, the majority of the property listings in Rochester are single family homes. Well-preserved Victorian neighborhoods as well as newer planned communities both offer affordable housing options.
- Paradise, Nevada—who wouldn’t want to live in Paradise? This is particularly true when you can probably find your dream home for under $150,000. Paradise, Nevada is an unincorporated town that is a suburb located just south of Las Vegas. Despite what many potential buyers think, housing prices in Las Vegas are actually rather low. As long as you are not looking for something along the strip, or in the heart of the casino district, a home buyer can easily locate a single family home for under $150,000. Moreover, neighborhoods such as Paradise are very family oriented with lots of green space, good schools, and old-fashioned community values. In addition, Las Vegas itself has made a real effort over the last decade to become more family friendly, meaning that there is a considerable amount museums, attractions, and activities for families within a short drive from Paradise.