Slideshow 12 best cities for housing market purchasing power

Published
  • June 07 2018, 12:00am EDT
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Advisors helping clients purchase a home may want to keep these cities in mind.

Housing market conditions are leaving prospective buyers with far less purchasing power than they had even a couple years ago, but certain cities are bucking the national trend with more favorable circumstances for house hunters.

Nationwide, demand for housing is outpacing low levels of inventory, driving prices sky-high and beyond peaks set during the last housing boom. Growth in mortgage rates, which are expected to rise throughout the year, has also added burdens for homebuyers in terms of how much they can afford to buy.

However, a strengthened economy has paved the way for job and income increases, putting more money in the pockets of consumers. And in cities with lower median house values and steadying price growth, purchasing power is not in as much danger as other more costly markets.

A First American analysis of home values that factors in local wages and mortgage interest rates in large cities found a 6.4% price increase nationally in March. But, in some markets like Washington, D.C., home prices have steadied or even declined, according to First American's Real Home Price Index.

Here's a look at the 12 best cities for housing market purchasing power. The data, from First American's RHPI, measures home price changes, taking local wages and mortgage rates into account "to better reflect consumers' purchasing power and capture the true cost of housing."

The March 2018 data is ranked by smallest year-over-year changes in RHPI for cities where the current value is less than 100 (an RHPI reading of 100 is equal to housing conditions in January 2000).

No. 12 Providence, Rhode Island

Median sale price: $252,750
RHPI: 90.47
Year-over-year RHPI: 6.62%

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No. 11 Chicago

Median sale price: $231,424
RHPI: 68.95
Year-over-year RHPI: 6.36%

No. 10 Portland

Median sale price: $365,000
RHPI: 99.45
Year-over-year RHPI: 5.25%

No. 9 Virginia Beach, Virginia

Median sale price: $227,500
RHPI: 93.81
Year-over-year RHPI: 4.94%

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No. 8 Raleigh, North Carolina

Median sale price: $259,750
RHPI: 80.03
Year-over-year RHPI: 4.88%

No. 7 Philadelphia

Median sale price: $217,594
RHPI: 84.64
Year-over-year RHPI: 4.73%

No. 6 Hartford, Connecticut

Median sale price: $216,100
RHPI: 72.72
Year-over-year RHPI: 3.26%

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No. 5 Memphis

Median sale price: $155,000
RHPI: 55.98
Year-over-year RHPI: 2.67%

No. 4 Oklahoma City

Median sale price: $159,500
RHPI: 72.81
Year-over-year RHPI: 2.63%

No. 3 Baltimore

Median sale price: $265,000
RHPI: 82.65
Year-over-year RHPI: 2.55%

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No. 2 Washington, D.C.

Median sale price: $383,000
RHPI: 85.39
Year-over-year RHPI: 1.22%

No. 1 Pittsburgh

Median sale price: $148,000
RHPI: 65.23
Year-over-year RHPI: -1.24%