The 7 top places to own a home in America — if you’re not rich

Want to buy a home but feel shut out by high prices? With the average home in the U.S. costing around $200,000, saving up for the typical 20% down payment can be tough.

But the problem may not be your saving habits. Instead, it may be where you live. That’s because the percentage of people who are homeowners in any given area can vary widely depending on everything from housing prices to the number of good jobs, to how many young people are trying to get their foot in the door alongside you. While the economy has recovered since the housing crash, just last year, homeownership reached a 50-year low of 62.9% as the after effects of the Great Recession persisted.

Now there are signs that could be changing. Homeownership rates have climbed nearly a full percentage point to 63.7%, according to the latest quarterly report from the Census Bureau. And housing inequality — the gap in homeownership rates between the richest and poorest residents in any given housing market — appears to be shrinking as well.

That’s according to a recent analysis from housing economists at the real estate site Trulia, which looked at homeownership rates for households headed by people aged 25 to 55 in the 100 largest U.S. housing markets. While wealthy households (defined as being in the top third by income of residents in a given market) are still 2.3 times more likely to own a home than their neighbors in the bottom third income level, that’s a 4% improvement from 2012 when wealthier households were 2.4 times more likely to own a home.

Given that income inequality has continued to climb over the same period, it’s a particularly surprising finding. “The income gap is widening, which isn’t a great factor for homeownership,” Trulia housing economist Felipe Chacón said in a phone interview. “But other factors are helping the gap narrow,” such as a wider range in home prices in certain markets, he added.

In some regions where the homeownership gap is quite high, like Los Angeles or New York City, the richest third of residents are more than four times as likely as the bottom third to own a home. But in other regions, that ratio falls below two.

Somewhat surprisingly, Chacón said that flat housing prices — a sign housing prices aren’t rising — actually aren’t that conducive to lower levels of housing inequality. That’s because the typical price for a home may still be too high for someone in the lower income bracket.

Instead, what’s needed is a wide range of home prices in a given area. “A wide spectrum helps people who are in the lower income group,” Chacón said. That happens when the population is older, or in working-class suburbs which can serve as “bedroom communities” for economic centers. A good example is West Palm Beach, Florida, where the home values range from about $138,000 for lower income households to just over $280,000 for higher income families.

If the economy continues to expand, Chacón said he would expect housing inequality to decline as well. But to mark the progress we’ve made since last year, here are the seven housing markets with the smallest homeownership gaps in the country, according to Trulia:

7. Montgomery County, Pennsylvania

Homeownership rate for the upper third of households by income: 91.3%

Homeownership rate for the bottom third of households by income: 41.2%

How much more likely the upper third are to own homes: 2.21 times

Montgomery County is a relatively wealthy area northwest of Philadelphia with a median household income of more than $94,000 per year and a median home value of $280,321. Nonetheless, households in the bottom third of incomes still manage to find affordable homes, with a 41% ownership rate.

6. West Palm Beach, Florida

Homeownership rate for the upper third of households by income: 76.8%

Homeownership rate for the bottom third of households by income: 34.8%

How much more likely the upper third are to own homes: 2.20

Florida is a standout when it comes to housing equality. In West Palm Beach, a tourist hub with a median home price of $204,883 and wide spread in home prices, ownership rates for the wealthiest groups are relatively low — around 76% — but that’s only slightly more than twice the rate for the bottom third.

5. Sarasota, Florida

Homeownership rate for the upper third of households by income: 76.0%

Homeownership rate for the bottom third of households by income: 35.2%

How much more likely the upper third are to own homes: 2.16

Gulf Coast city Sarasota is another Florida town that’s closing the gap on housing inequality. More than 35% of lower income households own homes and the median home price of $200,727 is close to the national average.

4. Fort Myers, Florida

Homeownership rate for the upper third of households by income: 72.5%

Homeownership rate for the bottom third of households by income: 34.2%

How much more likely the upper third are to own homes: 2.12

Fort Myers has a storied history as a popular winter retreat — Thomas Edison and Henry Ford used to spend their winters there — but its relatively low home prices (the median is $173,127) help explain why more than a third of lower-income residents there still own homes.

3. Troy, Michigan

Homeownership rate for the upper third of households by income: 88.2%

Homeownership rate for the bottom third of households by income: 42.9%

How much more likely the upper third are to own homes: 2.05

Detroit suburb Troy, Michigan has the third smallest gap in homeownership rates in Trulia’s study, with nearly 43% of low-income residents owning a home. That’s partially because the Detroit suburbs are just generally an affordable place to live. The median home value in Troy is $158,858, versus more than $280,000 per home in Montgomery County, Pennsylvania.

2. Daytona Beach, Florida

Homeownership rate for the upper third of households by income: 76.7%

Homeownership rate for the bottom third of households by income: 40.3%

How much more likely the upper third are to own homes: 1.90

Daytona Beach, Florida, is one of only two cities in the largest 100 metropolitan areas where the wealthiest households are less than twice as likely as the less affluent ones to own their own homes. It’s also the most affordable place on our list, with a median home value of $144,725.

1. Long Island, New York

Homeownership rate for the upper third of households by income: 93.0%

Homeownership rate for the lower third of households by income: 50.1%

How much more likely the upper third are to own homes: 1.86

Suffolk and Nassau counties in Long Island, New York, have the lowest gap in homeownership rates in the country, with slightly more than half of less affluent households owning their own home. That makes sense, Trulia’s Chacón said, given the number of working class, suburban neighborhoods combined with nearby jobs in New York City: “They’re slightly older, and slightly more ready to settle down.”

Interestingly, the median home value is relatively high at $384,858, but since the median income is high as well at $105,914, home ownership is affordable for the majority of residents.

Sign up for the Payoff — your weekly crash course on how to live your best financial life.