Relatively affordable home prices draw many new residents and companies to metro Phoenix

According to its latest ranking, the typical Valley homebuyer must earn $56,231 a year to afford a median-priced home in the area

Phoenix is still the most affordable city in the West on the list

Metro Phoenix is sliding down a list of the most affordable big U.S. cities to buy a home.

The Valley still ranks in the top 20, but is clinging to the last spot. In prior years, it sat comfortably in the top 10.

Phoenix-area home prices rebounded to a new a record in June with the median hitting $268,000.

In September, the area’s median dipped a bit, but prices ticked back up some last month.

Our relatively affordable home prices compared with other Western cities draw many new residents and companies, so the affordability of housing is an important indicator to watch.

MORE: Are manufactured homes the answer to metro Phoenix's affordable-housing problem?

What it takes to buy in Phoenix

The Phoenix area ranked in the top 10 for most affordable cities on national mortgage firm HSH.com’s quarterly list from 2014-17. Last summer, it fell to 17.

According to its latest ranking, the typical Valley home buyer must earn $56,231 a year to afford a median-priced home in the area — and that’s with a 20 percent down payment.

Last year, a Valley buyer needed to make only about $49,000 a year to afford the typical home.

Higher interest rates are making all cities less affordable for buyers.

The current rate on a 30-year mortgage is about 4.8 percent, up a percentage point from a year ago. That adds about $150 to a monthly payment on a $250,000 loan.

Most and least affordable cities

Pittsburgh is the most affordable big U.S. city for buying a house, according to the list. A buyer needs to make about $39,900 to afford one there.

Oklahoma City; Cleveland; Memphis, Tennessee; and Indianapolis round out the top five most affordable U.S. cities.

San Jose, California, is the toughest place to afford a home. A buyer needs to earn $257,000 to afford the area’s median price of $1.3 million.

San Francisco, San Diego, Los Angeles and Boston are the rest of the U.S.’ five priciest cities for buying.

Phoenix is still the most affordable city in the West on the list. Las Vegas is next at No. 25.

Won’t get easier to buy

Though some home shoppers are hoping Valley home prices will plummet as they did a decade ago, that’s not expected to happen anytime soon.

None of the big reasons for the crash in housing prices — bad loans, a recession or record foreclosures — are happening now.

Metro Phoenix’s median home price climbed up from $260,000 in September to $262,000 in October, according to The Information Market owned by the Arizona Regional Multiple Listing Service.

And Information Market housing analyst Tom Ruff said the Valley’s median home price could climb back up to $268,000 in the next few months.

READ MORE FROM CATHERINE REAGOR: