Forbes Top 10 Best Cities for Borrowers
March 26, 2010
Behind the Numbers
To find the best cities for borrowers, we first determined which cities had the lowest effective mortgage rates–the mortgage rate including the upfront fees–using data from the Federal Housing Finance Agency, the federal agency in charge of Fannie Mae and Freddie Mac.
We wanted to find out where borrowers were doing well overall, not just where mortgage rates were lower, so for the 35 major housing markets that the FHFA tracks, we factored in the change–from January 2008 to January 2009, the most recent data available–in the percentage of homes in foreclosure.
We also ranked the year-over-year change in the percentage of homes that were 90 days or more delinquent–the so-called “shadow inventory” that is soon to end up clogging the market with foreclosures–for each corresponding Metropolitan Statistical Area. For that we used data from Lender Processing Services, a Jacksonville, Fla.-based mortgage industry service provider.
By ranking metros on those four measures and averaging those rankings, we arrived at a list of the top cities for borrowers.
Here are the 10 cities that Forbes ranks as the best for borrowers:
1. Kansas City, Mo.
2. Houston
3. Dallas
4. Virginia Beach, Va.
5. San Antonio, Texas
Average Effective Home Mortgage Rate: 5.12%
Mortgages 90+ Days Delinquent, January 2009: 2.7%
Mortgages 90+ Days Delinquent, January 2010: 3.9%
Foreclosures, January 2009: 0.8%
Foreclosures, January 2010: 1.3%
6. Boston
7. Pittsburgh
8. Denver
9. Seattle
10. Portland, Ore.
Source: Forbes.com, Francesca Levy
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