Nov. 18, 2013 — Everybody nearing retirement should have their own criteria for choosing a place to retire. For many, it’s warm weather. Plenty of others want to be close to family, culture, or a favorite kind of recreation. Taxes on retirement income and distributions are often a key consideration. But for the millions of baby boomers whose meager savings are paired with tiny 401(k)s and social security benefits, finding an affordable place to live is consideration #1. This article provides a list of the most affordable places to retire in the USA, sliced two different ways.
We developed these lists using data from the NAHB/Wells Fargo Housing Opportunity Index (HOI), which is a measure of the percentage of homes sold in a given area that are affordable to families earning the area’s median income. In other words, the HOI compares home prices to what people make in a given area. Home prices might be above average there, but if the median income is also high, housing is still considered affordable.
We have seen this phenomenon before – if you are looking for inexpensive housing, get away from the coasts. The middle of the country – Indiana, Ohio, West Virginia, and Michigan – these are the states where your housing buck goes further.
List #1 – Most Affordable by HOI
Here are the top 10 most affordable housing metros, based on the NAHB/Wells Fargo Housing Opportunity Index (HOI). (3rd Q Median Home Sales Price follows the name of the Metro):
1. Kokomo, IN $95,000
2. Vineland/Milville/Bridgeton, NJ $132,000
3. Davenport/Moline/Rock Island, IA/IL $98,000
4. Indianapolis/Carmel, IN $93,000
5. Syracuse, NY $92,000
6. Bay City, MI $79,000
7. Springfield, OH $85,000
8. Dover, DE $187,000
9. Monroe, MI $120,000
10. Salisbury, MD $140,000
A caution. The Affordability Index tries to match local earning power with housing prices. However, if you are retired, you probably don’t have a significant income, which might limit the index’s applicability to your situation. You might be better off looking for markets with the absolute lowest housing prices. On the other hand, local salaries probably do correlate to local cost of living, so there is some relevance.
List #2 – Most Affordable by HOI – Sunbelt and Quasi-Sunbelt
A you can see, only 3 of the metros on the top 10 list above are linked to a Topretirements review. Not that we have reviewed every great place to retire in the country, but we have covered a lot of the better places. In order to try to provide a list of more affordable Metros that are also desirable places to retire, we went through the NAHB/Wells Fargo HOI rankings looking for metros in the sunbelt, or close to the sunbelt. Our goal was to find more affordable places that might be more attractive to retirees. The first number following the Metro refers to the HOI ranking (e.g.; #8), the second is the 3rd Q Median Sales Price. Clicking on the link in the city name will take you to our review of that town/city:
1. Dover, DE (#8 HOI, $187,000)
2. Carson City, NV (#17, $160,000)
3. Pueblo, CO (#21, $125,000)
4. Lakeland/Winter Haven, FL (#25, $110,000)
5. Wichita Falls, TX (#31, $100,000)
6. Winston-Salem, NC (#37, $128,000)
7. Roanoke, VA (#39, $145,000)
8. Ocala, FL (#42, $92,000)
9. Gainesville, FL (#44, $ $137,000)
10. Killeen/Temple/Ft. Hood, TX (#46, $138,000)
Housing will probably be your biggest expense in retirement. If funds are going to be tight, saving money on that expenditure will help improve the rest of your retirement lifestyle. Use the lists above for suggestions on finding your best place to retire. To find even more, here is a link to the full NAHB/Wells Fargo data (Complete Listing by Affordability Rank is the most useful).
Comments? Have you found or are considering an affordable place to retire? Please share your thoughts on how to save money on housing, including finding places where your dollars will go farther, in the Comments section below.
About the Housing Opportunity Index. The NAHB/Wells Fargo Housing Opportunity Index (HOI) is a measure of the percentage of homes sold in a given area that are affordable to families earning the area’s median income during a specific quarter. Prices of new and existing homes sold are collected from actual court records by Core Logic, a data and analytics company.
For further reading:
10 Affordable, and Highly Desirable, Places to Retire
Low Income Retirement – A Discussion