NBC News Home Buyers Index

According to a new real estate index, some parts of the United States are considered the easiest places to buy a home.

According to the NBC News Home Buyer Index, when counties are ranked by index rank, Iroquois County, Illinois is the easiest market to buy a home in.

When ordered by the four factors, the counties that ranked as least challenging were:

Cost: Iroquois County, Illinois is the most cost-effective and affordable housing market of all measured counties in the U.S. Competition: Somervell County, Texas is the least competitive housing market of all measured counties in the U.S. Scarcity: Imperial County, California is the market with the least housing shortage of all measured counties Economic Instability: Macon County, Tennessee has the most stable local economy of all measured counties.

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The index evaluates cost, competition, scarcity and economic instability.

According to NBC News, the most important factor is cost, which measures how much a home costs compared to household income, inflation, and expenses like insurance.

Competition looks at the level of demand in an area and the number of buyers looking to purchase a home.

Scarcity refers to the supply of homes for sale in an area and how many more are expected to enter the market within the next month.

And finally, economic instability considers local market volatility, unemployment rates, and interest rates.

The NBC News Home Buyer Index was developed by NBC News in collaboration with real estate industry analysts and housing experts, including bank economists from the Federal Reserve Bank of Atlanta.

The index score represents the level of difficulty of buying a home in a U.S. county on a scale of 0 to 100. The higher the value, the harder it is to buy a home in that area, according to NBC.

But when comparing counties, it’s important to take index rankings into account, said Joe Murphy, a data editor at NBC News who co-created the index, because “the rankings give context to the scores.”

A lower index ranking, or one close to the number of counties assessed in this month’s report – 1,310 – suggests a county’s market conditions are better for potential buyers. In other words, counties with a No. 1 index ranking are “the worst,” Murphy said.

For most Americans, buying and even maintaining a home in the United States remains expensive.

The average sales price of homes sold in the United States was $420,800 in the first quarter of 2024, according to the U.S. Department of Housing and Urban Development and the U.S. Census Bureau, via the Federal Reserve.

In addition to the high costs, 30-year fixed mortgage rates in the U.S. are still near 7%. With the Fed keeping rates steady at its June meeting, borrowing costs are unlikely to change significantly.

But if you’re planning on or hoping to become a homeowner, experts say there are ways to prepare.

For those who want to buy a home but remain on the sidelines, “getting financially prepared before buying a home is one of the most important things people can do,” said Daniel Hale, chief economist at Realtor.com.

“Take more time to really get your financial situation in good shape,” says Jacob Channell, senior economist at LendingTree. “It’s really important to take your time, especially when you’re making a six-figure purchase.”

There are three things to consider:

1. Improve your credit score: Take some time to pay off your debts and improve your credit score, says Channell.

Hale said credit scores help gauge your creditworthiness as a borrower. Depending on the lender, you may be able to qualify for a home purchase with a credit score of at least 500, according to Experian. But the higher your score, the better your mortgage terms may be, Hale said.

“Doing what you can to improve your credit score will increase your chances of getting a lower mortgage interest rate,” Hale said.

2. Get pre-approved from a lender: “It’s worth starting the process early so there are no surprises later,” says Hale, especially for buyers who haven’t purchased a home before.

Rate lock-in policies vary by lender. In some cases, lenders may allow you to lock in your mortgage rate after you’re pre-approved, says Channell.

But generally, pre-approval alone isn’t enough to guarantee an interest rate, Hale says, “because you can’t lock in a mortgage rate until you’ve completed a full mortgage application.”

“And you can’t apply for a full mortgage until you know the specific property you want to buy,” she said.

Hale said that once a buyer has made an offer on a property and officially begun the application process, the lender may be able to lock in the mortgage rate if they wish. Depending on the lender, the mortgage rate will be locked in for 30 to 60 days, which is “enough time to get through the closing process,” Hale said.

Hale said people should ask their lender how long their rate will be locked for and at what stage their mortgage rate will be locked in.

3. Budget and save intentionally: “What people should do is budget and save,” says Channell. The longer you give yourself time to save money for expenses like a down payment and closing costs, “you’ll probably be in a better position,” he says.

Buying a home “will mean a higher monthly payment than you’re used to,” Hale said, so he suggests considering putting aside money for an extra payment as you prepare to buy a home.

Hale said this can help people build up savings for a down payment or an emergency fund, and “can give you an idea of ​​how comfortable you are with your mortgage payments.”

“It’s better to be a renter who can afford a rental property than to be a homeowner who can’t afford a home,” Channell said.