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Buzzing Midwest city has just been named the most affordable in the US - experts explain why it is so cheap
A major Midwest city has been named the most affordable place to live in the US.
Fort Wayne, the second largest city in Indiana, earned the title due to its low housing costs, booming economy and reasonable cost of living.
Average rent and home costs are well below the national average, according to the ranking by US News and World Report.
Many households make a decent income to live comfortably in the city, it found.
Fort Wayne is far cheaper than nearby major cities like Chicago and Detroit, but still boasts a buzzing downtown district and famous institutions such as the Science Central museum and the Children's Zoo.
Fort Wayne, the second largest city in Indiana , earned the title due to its low housing costs, booming economy and reasonable cost of living
'Rent and housing prices in Fort Wayne are lower than most big cities in the US for a few reasons,' Seamus Nally, CEO at TurboTenant, a property management software company, told U.S. News and World Report.
The biggest reason is the city's population, he said.
'Though the city has experienced growth in the past few years, and rent and housing prices are definitely going up, Fort Wayne is far less populated than most big cities.
'This means that the demand for housing doesn't outweigh supply in nearly the same ratio as other cities, which helps keep prices more reasonable.'
The median home price in the city is $169,485, according to the outlet, and the average cost for monthly rent is $1,078.
These are both far below the national averages of $362,481 and $2,069, according to Zillow.
The rental market in the city benefits from a sufficient supply of housing relative to demand, according to Doug Roller, founder of Fort Wayne-based Crossroads Financial Group.
There are a variety of rental properties available, he said, which helps keep prices competitive.
Building a home is also generally cheaper in the city, which means developers are able to build more homes at reasonable prices, said Roller.
While the cost of homeowners insurance is projected to increase by around 7 percent this year in Indiana, according to Insurify, other states such as Louisiana are anticipating a double digit increase of 23 percent.
That projected hike is largely due to climate risks in the southern state.
Fort Wayne has a median household income of $71,507, U.S. News and World Report, said.
This is slightly below the national average of $75,149, but the lower cost of living and employment opportunities in the city make up for it.
On average, residents spend just 19.56 percent of their income on housing expenses.
According to Roller, many families can easily afford a home in Fort Wayne without being financially strained.
'The general rule is that housing should not exceed 30 percent of gross income,' he said.
'Residents generally enjoy a comfortable standard of living with sufficient disposable income for savings or leisure activities after meeting essential needs.'
The median home price in Fort Wayne is $169,485 and the average cost for monthly rent is $1,078, which are far lower than the national averages
Fort Wayne is far cheaper than nearby major cities like Chicago and Detroit, but still boasts a buzzing downtown district
Many people moved to Fort Wayne during the pandemic in search of a cheaper cost of living (Pictured: Rose Garden in Lakeside Park, Fort Wayne)
As the cost of living increased during the pandemic in nearby major cities such as Chicago and Detroit, many people looked to Fort Wayne as a more affordable option.
'Many people that thought they might never own a home in other areas of the country have moved here and found out that not only could they buy a home, but they could also buy a very nice home,' said Mary Sherer, broker and owner of ERA Crossroads in Fort Wayne.
Fort Wayne initially struggled with a low housing supply but it is improving, she said, and while prices have risen it is still considered an affordable market.
'While we have been hampered by low inventory, the local homebuilders have stepped up and added new homes to the market at record numbers,' Sherer said.
Tax rates in Indiana are on the middle of the scale - the state has a flat income tax rate of 3.05 percent and a 7 percent sales tax.
But residents will see cost savings when it comes to their car insurance.
According to recent data from the National Association of Insurance Commissioners, the average auto insurance premium in Indiana is $905.61, compared to the national average of $1,258.10.