Top 20 cheapest neighborhoods to buy a home in the U.S

In order to determine the cheapest neighborhoods to buy a home, we gathered data from real estate firm Zillow, and looked at the lowest median home prices of neighborhoods in the 20 most populous cities in the country.

The neighborhoods on this list are cheaper than others in their city for a number of reasons. Sometimes the average home size is smaller; some places have a lot more condos than single-family homes; some places are still dealing with a huge number of foreclosures and haven't recovered from the housing crisis yet, while other places have long histories of unemployment and crime.

Melrose, New York 
If you're looking for a cheap place to live in New York City, Staten Island or the Bronx are your best bets. The Melrose neighborhood in the Bronx is the cheapest in the city with the median price at $200,300, followed by a slew of North Shore neighborhoods in Staten Island, which range from $221,700 to $250,300. A number of new development projects have started to turn around Melrose, which has a high concentration of people living in public housing.

Boyle Heights, Los Angeles
The least expensive areas in Los Angeles are scattered throughout the city, but many are located within South Los Angeles or the San Fernando Valley, where median home prices are under $300,000. However, Boyle Heights on the city's east side has the lowest median price at $254,000. Home prices are making leaps and bounds in these areas, having increased double digits over the past year.

O'Hare, Chicago
Compared to its big-city counterparts Los Angeles and New York City, Chicago's median home price is a steal at $159,000. But if you're looking for a place even cheaper than that, head to the O'Hare area where the median price is a meager $85,700. For that price, you are committing to living near the fifth busiest international airport in the world. If you want to skip the airplane noise, the next cheapest neighborhood is Roger's Park, followed by West Humboldt Park, where median prices hover around $100,000. Roger's Park is home to Loyola University and edges along Lake Michigan. West Humboldt Park is located near some of the city's hottest neighborhoods such as Logan Square and Wicker Park, but it hasn't seen the same kind of gentrification yet.

Harrowgate, Philadelphia
Homes in Philadelphia are cheap, cheap, cheap--the median price is $104,000. For the fourth-biggest city in the country, you can buy a home in Philly for less than a down payment in most areas, but that comes at a cost. The cheapest neighborhoods in Philadelphia have not weathered the recession well, and are experiencing high levels of unemployment and crime. The least expensive are the Harrowgate neighborhood with a median price of $38,600, the Fairhill neighborhood with a median price of $39,300 and Strawberry Mansion with a median price of $41,800. There are also some up-and-coming neighborhoods where homes are cheap, like Brewerytown, where you can find homes around $60,000. Prices there have increased nearly 25 percent since last year.

Alahambra, Phoenix
Only three "urban villages" in Phoenix fall below the city's median price of $141,900. Alahambra has a median price of $98,300, followed by Estrella at $110,100 and then Encanto at $139,900. Prices in Alahambra, an older suburban village located a few miles from downtown, are up nearly 50 percent over last year, an incredible turnaround in just a year.

Charleston Heights, Las Vegas
The cheapest neighborhood in Las Vegas is tiny Charleston Heights, located on the northern end of Las Vegas, miles away from downtown. The median price there is $86,300. The next cheapest is Winchester, where the median price is $94,100. Unlike Charleston Heights though, Winchester includes part of Las Vegas Boulevard, with all the accompanying attractions.

Like the rest of Vegas, both communities' home prices are up nearly 30 percent over last year--which is still only half what they were worth before the bubble burst. Read more >>

Shiller: Housing Recovery Could Take 50 Years

From housing starts to home prices, renowned economist Robert Shiller acknowledged "there are a lot of positive signs" for the U.S. housing market right now, but told CNBC Wednesday it's still unclear if a recovery is actually in place.

After all, Shiller noted the housing futures market for single-family homes was only "mildly optimistic" before superstorm Sandy struck the U.S.'s East Coast with expectations for just 3 percent growth per year over the next four years.

"If it goes up 3 percent a year that means that, in real terms, housing is just about flat," Shiller said. "It's not a recovery to write home about."

Shiller is probably best known for helping create the Standard & Poor's/Case Shiller index, a widely-followed measure of housing prices, which recently revealed that U.S. home prices rose 2 percent in August compared to one year ago. Meanwhile, the NAHB/Wells Fargo Housing Market Index - a survey of homebuilders - recently climbed sharply higher. Read more >>

Half of mortgage borrowers under 40 are underwater

Rising home prices helped nearly one million homeowners emerge from being underwater on their mortgages during the second quarter. But younger homeowners are still struggling to stay afloat, according to report from Zillow.

The percentage of borrowers who owed more on their homes than they were worth fell to 30.9% during the second quarter, down from 31.4% three months earlier, according to Zillow. Of the 15 million borrowers who were underwater during the quarter, a disproportionately large number are under the age of 40, said Zillow chief economist, Stan Humphries.

Nearly half, or 48%, of all mortgage borrowers under age 40 are underwater, about twice the rate of borrowers who are older. And that has created a sort of gridlock that could hinder the housing market's recovery, he said.

"We hear about tight inventory in many markets, and it's clear where this is coming from," he said. "Negative equity is trapping young people in their homes, preventing them from selling. These homes are like the very starter homes potential first-time homebuyers are seeking." Read more >>

New Home Sales Collapse 8.4%

New home sales declined 8.4 percent sequentially in June, missing expectations and falling to the lowest level since January. Sales fell to an annual rate of 350,000, according to new data from the U.S. Census Bureau.

Economists polled by Bloomberg had forecast a 0.7 percent increase, to 372,000 units. Median home prices also declined during the month, falling roughly $5,000 to $232,600. Deutsche Bank's Joe LaVorgna noted that part of the problem stems from the drop in housing starts since the financial crisis began in 2007.

"The lack of building means it is doubtful we can see a sustained rise in home sales even toward the higher end of their range," he says. "However, based on the National Association of Homebuilders’ housing market index, we expect this situation to change over the next couple of years." Read more >>

US Homeownership Rate Hits 15-Year Low

Despite the incentives to buy now — namely that average rates on a 30-year mortgages are now 3.7% — sales of single-family existing homes slipped 1.5% in May from a month earlier, according to data released today by the National Association of Realtors. Experts say the drop, which came during the historically busy spring season, suggests the housing market has a way to go to recover. If anything, the ranks of American homeowners are dwindling. The homeownership rate in the U.S. fell slightly from 66% to 65% during the first quarter of 2012 — the lowest in 15 years, according to the latest data by the U.S. Census. (It peaked at just over 69% in 2004.)

 Renters, meanwhile, have more inventory to choose from as owners who are unable to sell their homes often have no choice but to find tenants, says Dan McCue, research manager at Harvard University’s Joint Center for Housing Studies. The number of single-family homes for rent or being rented grew by two million units from 2006 to 2010, according to a JCHS report released this month, and McCue says the number has likely grown since then. “One third of all rentals are single-family homes,” he says. Read More >>

Pending Sales of U.S. Homes Decrease by Most in a Year

The number of Americans signing contracts to buy previously owned homes fell in April by the most in a year, indicating the U.S. housing recovery remains uneven.

The index of pending home resales dropped 5.5 percent following a revised 3.8 percent gain the prior month, figures from the National Association of Realtors showed today in Washington. The median forecast of 42 economists surveyed by Bloomberg News called for no change in the measure.

Mortgage rates at record lows failed to sustain the pace of demand as some buyers may have waited for home prices to decline further. Limited access to credit and persistent foreclosures still weigh on housing, adding to concern it will remain a source of weakness for the world’s largest economy. Read more >>

Home Prices Fall to Lowest in 10 years

Home prices hit new post-bubble lows in March. Average home prices were down 2.6% from 12 months earlier, according to the S&P/Case-Shiller home price index of 20 major markets. Home prices have not been this low since mid-2002.

In 13 of the 20 cities, average home prices fell in March from the year before. Atlanta fared the worst, with home prices down 17.7% year over year. Home prices in Atlanta, Cleveland, Detroit and Las Vegas are all below their January 2000 levels.

Alternatively, Phoenix posted the largest gain, with prices up 6.1% from last year. Other cities showing an uptick included Dallas, Denver and Miami. Overall, the 20-city composite is down about 35% from its peak in 2006. Read more >>

U.S. Homeownership Hits Decade Low

PRINCETON, NJ - The 62% of Americans who say they own their own home marks a new low since Gallup began tracking self-reported homeownership in 2001.

The current level of homeownership marks a decline from 68% in 2011. For most of the prior decade, roughly seven in 10 Americans reported owning their own home. While the recession and financial crisis took place in 2008-2009, homeownership rates didn't begin to reflect the bursting of the housing bubble until 2010, when 65% of Americans reported owning their own home -- the lowest level recorded before this year. More...

Home prices heading for triple-dip

Image via WikipediaThe besieged housing market has even further to fall before home prices really hit rock bottom. According to Fiserv, a financial analytics company, home values are expected to fall another 3.6% by next June, pushing them to a new low of 35% below the peak reached in early 2006 and marking a triple dip in prices.

Several factors will be working against the housing market in the upcoming months, including an increase in foreclosure activity and sustained high unemployment, explained David Stiff, Fiserv's chief economist.

Should home values meet Fiserv's expectations, it would make it the third (and lowest) trough for home prices since the housing bubble burst.

The first post-bubble bottom was hit in 2009, when prices fell to 31% below peak. The First-Time Homebuyer Credit helped perk prices up by mid-2010, but by the time the credit expired, prices fell again. More...

Home equity sinks to nearly lowest point since World War II

Falling home prices have shrunk the equity Americans have in their homes to nearly the lowest percentage since World War II.

Average home equity plunged from more than 61% at the start of 2001 to 38% in the January-March quarter this year, the Federal Reserve said in a report Thursday. That drop comes as home prices in big metro areas have reached their lowest level since 2002.

Prices fell 33% in 20 cities through March from their 2006 peak, reaching their lowest level since 2003, according to the Standard & Poor's/Case-Shiller index of U.S. home prices on May 31. The decline signaled a "double dip" as the index fell below its previous post-housing-bubble low set in April 2009. Prices more than doubled from 2000 to July 2006.

Further declines in home prices are likely. More...

‘Underwater’ Homeowners Rise to 28 Percent

More than 28 percent of U.S. homeowners owed more than their properties were worth in the first quarter as values fell the most since 2008, Zillow Inc. said today.

Homeowners with negative equity increased from 22 percent a year earlier as home prices slumped 8.2 percent over the past 12 months, the Seattle-based company said. About 27 percent of homes were “underwater” in the fourth quarter, according to Zillow, which runs a website with property-value estimates and real-estate listings.

Home prices fell 3 percent in the first quarter and will drop as much as 9 percent this year as foreclosures spread and unemployment remains high, Zillow Chief Economist Stan Humphries said. Prices won’t find a floor until 2012, he said.

“We get tired of telling such a grim story, but unfortunately this is the story that needs to be told,” Humphries said in a telephone interview. “Demand is still quite anemic due to unemployment and the fact that home values are still falling. And that tends to make people more cautious about buying.” More...

U.S. homebuilder sentiment down as home prices continue falling

Image via WikipediaU.S. homebuilder sentiment slipped a notch in April as home prices continued to fall in most areas of the country amid widespread foreclosures, a survey released on Monday showed.

The National Association of Home Builders/Wells Fargo Housing Market index fell to 16 from 17, leaving the index in the pessimist range for a full five years.

A reading above 50 indicates that more builders view sales conditions as good than poor. The index has not been above 50 since April 2006.

“The spring home buying season is getting off to a slow start due to persistent concerns about home values as more foreclosures seem to be hitting the market, increasingly restrictive lending requirements for home buyers and builders, and the slow pace of economic recovery," said David Crowe, the NAHB's chief economist. More...

While housing lost 31% of its value from 2006 to 2009, property taxes went up by 27%

Something remarkable happened to property taxes in the U.S. while housing lost 31% of its value from 2006 to 2009: they went up by $100 billion (27%). Equally remarkably, as we can see from this U.S. Census Bureau data on state and local tax revenues, property taxes went up even when housing slumped in the early 1990s.

So though U.S. housing continues losing value--U.S. home prices declined in January, continuing a downward trend that began in August, with average U.S. home prices retreating to summer 2003 levels, according to the S&P Case-Shiller home-price indexes--property tax revenues continue their inexorable rise. More...

Homeownership falling at alarming pace - 11 Percent of US Houses Empty

America's home ownership rate, after holding steady for a while, took a pretty big plunge in Q4, from 66.9 percent to 66.5 percent. That's down from the 2004 peak of 69.2 percent and the lowest level since 1998.

Homeownership is falling at an alarming pace, despite the fact that home prices have fallen, affordability is much improved and inventories of new and existing homes are still running quite high.

Bargains abound, but few are interested or eligible to take advantage.

More concerning than the home ownership rate is the vacancy rate. The Census tables don't tell the entire story, but they tell a lot of it. Of the nearly 131 million housing units in this country, 112.5 million are occupied. 74.8 million are owned, and that's only dropped by about 30 thousand in the past year. 38 million are rented, but that's up by over a million year over year. That means more new households are choosing to rent. Read more...