Where homebuying is most (and least) affordable

Looking for an affordable home? Here are 5 cities that are good bets, and 5 cities where owning is tough.

Most affordable: Buffalo, N.Y.

most affordable buffalo new york
  • Median home price: $105,000
  • Median income: $55,100
  • Affordability score: 91.8%

New York State's second-largest city has more in common with its Rust-Belt Midwestern neighbors than with the giant downstate metropolis centered around New York City.

For decades, Buffalo had been a city of steel mills, grain storage and auto manufacturing, as well as railroad and Great Lakes shipping. With the decline of heavy industry, the area has gone through a somewhat rocky transformation into a service economy.

The population has fallen about 2% since 2000, and the drop in demand for housing has hurt home prices. Even during the height of the housing boom, the median price never exceeded $120,000. In the second quarter, affordability was up slightly, thanks to rock-bottom interest rates.

Source: Data is from the National Association of Home Builders and Wells Fargo Bank

The affordability score is the percentage of homes sold in a metro area that a family earning the median income can afford to buy. Index scores are calculated based on income and home price data, as well as current mortgage interest rates.

  @CNNMoney - Last updated August 15 2012 05:25 AM ET

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