Dive Brief:

• Coldwell Banker’s annual Home Listing Report looks at more than 2,000 U.S. real estate markets to rank the most expensive as well as the most affordable markets in each of the 50 states.

• The report compares the average price of a four-bedroom, two-bathroom home.

• The first 11 entries are all in California, with Saratoga topping the list with the highest average price of $2,453,718. Detroit comes in at bottom at $64,110, along with other Rust Belt cities including Cleveland and Buffalo, NY, where slower recovery is keeping the cost of living low as jobs return to the region.

Dive Insight:

Western states far outpace any other region for the most expensive real estate. But in many popular cities, income is way below what a buyer needs to purchase a home. Citing the Coldwell Banker ranking, Business Insider reports that in Austin, TX, the average cost of a 4-bedroom, two-bathroom home is $414,563 and the median household income is $55,216; that same home in Salt Lake City is $424,867 and the median household income $45,833. Mortgage lenders usually suggest that home price should be no more than two-and-a-half times income.

Millennials are expected to form two million households each year for the next 10 years, according to Harvard University’s Joint Center for Housing Studies. They’re looking for affordability and livability — places with jobs, nightlife and outdoor amenities. And they're likely to find all of that in places such as Minneapolis ($294,000), Harrisburg, PA ($168,000), or Virginia Beach ($256,000), where Realtor.com weighed home prices along with affordability, inventory, mortgage availability, job growth and livability. Other cities that round out Realtor.com’s top 10 are: Portland, ME; Allentown, PA; Philadelphia; Albany, NY; St. Louis; Dayton, OH; and Baton Rouge, LA.

Recent research from Bank of America shows that first-time buyers are looking for single-family homes in the suburbs. D.R. Horton’s nationwide sales of its entry-level Express Homes was brisk in 2015. Meritage recently put forth its LiVE.NOW. homes, which are targeted to first-time buyers.  

However, with housing still climbing and mortgage rates expected to rise, first-time home buyers may wait.