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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: Modesto, Calif.

most affordable modesto california
  • Median home price: $135,000
  • Median income: $62,000
  • Affordability score: 91.5%

The foreclosure crisis has hit Modesto's housing market hard in the last few years, driving down home prices. It had the fourth highest rate in the nation according to a July report from RealtyTrac.

The housing bubble had inflated home prices far out of proportion to income in the Central Valley city. Once the bust hit, prices dropped by about two-thirds from their late 2005 peak, putting mortgage borrowers in jeopardy.

The continuing flood of foreclosures coming onto the market has kept home prices at bargain-basement levels, and Modesto homebuyers are reaping the benefits.

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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