NBC News Home Buyers Index

There are areas in the United States that are considered among the least difficult places to buy a home, according to a new real estate index.

When counties are sorted by index ranking, Iroquois County, Illinois is the least difficult market to buy a home in, according to the NBC News Home Buyer Index.

The following counties were ranked as least challenging when ranked by the four contributing factors:

Cost: Iroquois County, Illinois is the most cost-effective or affordable housing market among the counties measured in the United States. Competition: Somerville County, Texas is the least competitive housing market among the counties measured in the United States. Rarity: Imperial County, California is the least scarce of housing. Market between measured regions. Economic Instability: Macon County, Tennessee has the most stable local economy among the areas measured.

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

Cost, the most weighted component, measures how much a home costs compared to household income and inflation, as well as expenses such as insurance costs, according to NBC News.

Competition looks at the level of demand in an area or the number of buyers who are in the market for a home.

Scarcity refers to the supply of homes listed for sale in the area and the number of more homes expected to hit the market in the next month.

Finally, economic instability takes into account market fluctuations in the region, unemployment levels, and interest rates.

The NBC News Home Buyers Index was developed by NBC News along with housing experts, such as a real estate industry analyst and a bank economist from the Federal Reserve Bank of Atlanta.

On a scale of zero to 100, the index score represents the difficulty level of buying a home in a U.S. county: the higher the value, the more difficult it is to buy a home in that area, according to NBC.

But, to compare counties to each other, it's important to look at the index's ranking because “the rankings provide context for the results,” said Joe Murphy, a data editor at NBC News who co-created the index.

A lower index rating — or closer to a value of 1,310, which is the number of counties measured in this month's report — indicates that the county has better market conditions for potential buyers. In other words, Murphy said the county ranked first in the index “is the worst.”

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

The median 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.

On top of the higher cost, the interest rate on a 30-year mortgage in the United States is still close to 7%. Borrowing costs are unlikely to change significantly as the Federal Reserve kept interest rates steady at its June meeting.

However, if you're planning or aspiring to own a home, there are ways to prepare, experts say.

If you want to be a homeowner, but are sitting on the sidelines, “financial preparation is one of the most important things people can do” before buying a home, said Danielle Hale, chief economist at Realtor.com.

“Spend more time putting your money in really good shape,” said Jacob Channel, chief economist at LendingTree. “It's very important, especially when you're making a six-figure purchase, to really take your time.”

Here are three things to consider:

1. Boost your credit score: Take a moment to pay off debt and increase your credit score, says Channel.

Your credit score helps measure how creditworthy you are as a borrower, Hill said. You'll likely qualify to buy a home with a minimum credit score of 500, depending on the lender, according to Experian. But having a higher score can help you achieve better mortgage terms, Hill says.

“Doing everything you can to improve your credit score will increase your odds of getting a lower interest rate on your mortgage,” Hill said.

2. Ask for pre-approval from lenders: “It helps to start the process earlier rather than later so there aren't a lot of surprises,” especially for buyers who have never bought a home before, Hill said.

Rate lock policies will depend on the lender. In some cases, the lender will allow you to lock in your mortgage rate after pre-approving you, the channel said.

But generally, pre-approval isn't enough to guarantee an interest rate, Hill said, “because you can't lock in a mortgage rate until you have a complete mortgage application.”

“And you can't submit a full mortgage application until you have a specific property you want to buy,” she said.

Once a buyer makes an offer on a property and officially begins the application process, a lender may be able to lock in a mortgage rate if you request it, Hill said. Depending on the lender, the mortgage rate will be locked in for a period of 30 to 60 days, which is “sufficient time for the closing process to occur,” Hill said.

Ask your lender about the interest rate lock-in period and ask what stage in the process the mortgage rate locks in, Hill said.

3. Intentionally budget and save: “The thing people should do is budget and save,” Channel said. The more time you give yourself to save money for expenses like the down payment and closing costs, “the better off you'll likely be,” he said.

When someone becomes a homeowner, “they'll have a higher monthly payment than they had before,” Hill said. So, as you prepare for home ownership, consider putting an extra amount aside, she suggested.

This will help build savings for a down payment or emergency fund, and “gives an idea of ​​how comfortable housing payments are,” Hill said.

“It's better to be a renter who can afford your rental unit than a homeowner who can't afford your home,” Channel said.