Along with the housing recovery has come a steep climb in home values and ever-weakening affordability.
Tight supply in markets across the nation has only exacerbated the price pinch. There are, however, plenty of housing markets that offer both affordability and lavish living. As more jobs become flexible in where they need to be located, affordable markets could become more attractive and better investments.
As a basis of comparison, the national average listing price of a four-bedroom, two bathroom home is $302,632, according to a new report from Coldwell Banker Real Estate. In the nation's most expensive market, Newport Beach, California, that same home will list for $2.3 million. In the least expensive market, Cleveland, Ohio, it will list for $74,502.
"Cleveland's community, revitalized downtown and renewed sense of pride have contributed to the rapid growth in this market," said Ed Dolinsky, president of Coldwell Banker Hunter Realty in Cleveland, in the report. "Many first-time home buyers and young professionals are looking at Cleveland as an affordable place to settle down and enjoy all of the great things the city has to offer."
Home prices in Cleveland are up nearly 3 percent from a year ago, according to S&P/Case-Shiller. Price growth in cities such as New York and Washington, D.C., some of the least affordable markets, are growing at a slower pace.
Affordability is becoming more of a headwind, as the housing market continues through its slow recovery. Analysts at Credit Suisse noted, in their monthly survey of real estate agents, that buyer traffic in October was still below expectations.
"This month agents continued to attribute the softness to both buyers' unwillingness to pay current prices and a limited supply of desirable inventories," Michael Dahl, Matthew Bouley and Anthony Trainor wrote in the Credit Suisse report.
Sentiment among homebuyers also slipped in October, according to another monthly report from Fannie Mae. The share of respondents saying now is a good time to buy a house fell 2 percentage points to 34 percent, after rising the prior two months.
"The income growth necessary for renewed momentum in housing market sentiment remains elusive, even though consumers' confidence in their job security continues to strengthen," said Doug Duncan, senior vice president and chief economist at Fannie Mae.
The nation's homebuilders have increasingly focused on higher-end, higher-priced homes, as that is where the bulk of buyer demand has been. As more young workers consider homebuying, however, that strategy may backfire.