Top 10 Cities Black Families are Looking for Affordable Starter Homes
Homeownership is key for building generational stability, yet for many Black families, it may feel increasingly out of reach. A typical Black family may need to devote a much larger share of their earnings to afford a starter home than other buyers.
Only 10 of the largest metropolitan areas have starter homes that a typical Black family can afford, according to a recent report from Redfin. Meanwhile, the average white family can typically afford homes in 32 of those metros.
"Starter homes have become increasingly difficult for everyone to afford, with prices of the typical starter home up 8% in the last year alone," Redfin Senior Economist Elijah de la Campa said in a statement. "That has pushed higher-earning buyers to purchase starter homes, pushing lower-income buyers out of the market—and many of those lower-income buyers are Black."
However, some Rust Belt cities, like Detroit and St. Louis, offer better opportunities for Black families to achieve homeownership, according to the Redfin report.
A family earning the median income of $57,129 for Black families would roughly need to spend 41% of their income to purchase a $250,000 entry-level home, according to the Redfin. Meanwhile, a white family earning the median household income of $90,995 for this group would only spend 26% of their earnings on the same home.
Starter homes are generally more affordable homes. They can cost anywhere from $66,000 in less expensive Detroit to nearly $1 million in pricey San Francisco. This can make it a challenge for lower-income families to buy homes in high-cost areas.
"The greatest strategy we can employ to help Black families achieve homeownership success is to set them up to win," said Kasey Arceneaux, strategic business development manager at New American Funding. “Understanding costs like insurance, upkeep, and maintenance is crucial. … Knowledge is power."
The Redfin analysis looked at estimated median monthly payments for starter homes sold in May in the 50 largest metro areas. It factored in a 7.06% mortgage rate, a 5% down payment, and included taxes and insurance costs. The report also used median household incomes by race.
Below are the top 10 cities where Black buyers can find more affordable starter homes.
1. Detroit
Percentage of income spent on starter homes: 16%
Median Black household income: $43,985
With a population of approximately 668,000 within the city limits and 3.5 million in the metropolitan area, Detroit is the most affordable central metro area for Black families looking to buy a starter home, according to data from the Census Reporter and the Redfin analysis.
Detroit was once an auto manufacturing powerhouse and is still home to major employers like General Motors, Ford Motor Company, and the Detroit Medical Center. However, as plants shuttered and downsized, unemployment rose and home prices fell.
Homebuyers looking for super-cheap properties can find a variety of fixer-uppers.
"Many of these [starter] homes have never been properly updated," said Detroit-area real estate agent Tom Nanes of Community Choice Realty Associates. "You need updated electrical, heating, plumbing, and new windows."
2. St. Louis
Percentage of income spent on starter homes: 21%
Median Black household income: $55,391
St. Louis, known for the Gateway Arch and its vibrant music scene, is home to major employers like Anheuser-Busch, Boeing, and Washington University.
Locals can enjoy the area’s famed barbecue and blues music scene as well as the lower home prices.
The median home sale price in St. Louis was just $235,000 in May. That’s well under the national median of nearly $438,500, according to Redfin.
3. Baltimore
Percentage of income spent on starter homes: 23%
Median Black household income: $92,147
This historic city is renowned for its Inner Harbor, diverse neighborhoods, and seafood cuisine. Employers like Johns Hopkins University and Hospital, Under Armour, and T. Rowe Price contribute to Baltimore's economic landscape.
"Baltimore is a place that mixes a lot of Southern charm with a lot of the benefits of being in a Northeastern industrial town," said Wayne Curtis, a real estate professional with Sotheby's International Real Estate. "The city itself has numerous programs for down payment assistance and other homebuyer education-related grants, demonstrating the support available for first-time homeowners."
4. Indianapolis
Percentage of income spent on starter homes: 26%
Median Black household income: $63,758
Known for the Indianapolis 500, Indianapolis is home to major employers such as Eli Lilly and Company, Anthem Inc., and Indiana University Health.
"We're not only a very affordable housing market, but we're also one of the most affordable cities globally for the cost of living," said Kristie Smith, a local real estate agent with Indy Homes. "You can still buy a house in Indianapolis for $200,000 or less."
5. Philadelphia
Percentage of income spent on starter homes: 27%
Median Black household income: $50,652
Philadelphia is famous for landmarks like the Liberty Bell and Independence Hall—as well as iconic dishes like the Philly cheesesteak and hoagies.
The city is home to the Philadelphia Museum of Art, renowned for the "Rocky Steps," and the Barnes Foundation, which houses one of the largest collections of impressionist and post-impressionist paintings.
The city's sports culture is another cornerstone of its identity, with passionate fans supporting teams like the Eagles football team and the 76ers basketball team.
6. Cleveland
Percentage of income spent on starter homes: 27%
Median Black household income: $47,395
Cleveland’s location on Lake Erie provides numerous recreational and economic opportunities.
Major employers like Cleveland Clinic, University Hospitals, KeyCorp, Sherwin-Williams, and Eaton Corporation.
The city's vibrant arts scene includes renowned museums such as the Cleveland Museum of Art and the Rock and Roll Hall of Fame.
7. Pittsburgh
Percentage of income spent on starter homes: 29%
Median Black household income: $40,847
The city is renowned for its steel industry heritage, scenic rivers, and numerous bridges.
Major employers such as UPMC, PNC Financial Services, and Carnegie Mellon University contribute significantly to Pittsburgh's robust job market.
As of 2024, Pittsburgh, Pennsylvania, has a population of about 1,707,619 and an unemployment rate of 3.3%, according to the U.S. Census Bureau and the U.S. Bureau of Labor Statistics.
8. Warren, Michigan
Percentage of income spent on starter homes: 30%
Median Black household income: $62,019
Warren is located approximately 15 miles north of downtown Detroit. This makes it a convenient location with easy access to the city's amenities and job opportunities.
Home prices in the city are also affordable with a median sale price of just $195,000 in May, according to Redfin.
9. Columbus, Ohio
Percentage of income spent on starter homes: 30%
Median Black household income: $64,839
As the state capital of Ohio, Columbus also hosts many governmental and administrative functions, enhancing its importance as a political and economic hub.
The area is also home to more than a dozen colleges and universities, such as Ohio State University.
10. Kansas City, Missouri
Percentage of income spent on starter homes: 30%
Median Black household income: $58,320
Kansas City, which straddles the Missouri and Kansas state lines, is famous for its jazz heritage, barbecue cuisine, and numerous fountains.
Major employers such as Cerner Corporation, Hallmark Cards, and HCA Midwest Health drive the local economy, providing employment opportunities.
Take the next step in your homeownership journey with New American Funding.