Currently Reading

Affordability Worsens for First-Time Buyers

Advertisement
Affordability

Affordability Worsens for First-Time Buyers


August 4, 2021
housing costs
Photo: indysystem | stock.adobe.com

Buying a home remained difficult in the second quarter of 2021, but it became even more difficult for first-time homebuyers. NerdWallet analyzed home affordability for first-time buyers in the country’s largest metros, finding a notable loss of affordability for these usually younger buyers with less robust credit histories and tighter budgets. Across the 50 most populous metros, homes were 5.5 times more than the median income for a first-time buyer compared to the previous quarter’s 5.2 times. The most affordable metros, Cleveland, Buffalo, NY, and Baltimore, were still more than three times the median first-time buyer income.

Five California metro areas have shared the least-affordable spots in our analysis for the past year, and Los Angeles always tops this list. In Q2, homes in Los Angeles were listed at 13 times typical first-time buyer income, followed by San Diego (9.2), San Jose (8.4), San Francisco (7.6) and Sacramento (7.5).

First-time home buyer guidance: Where you buy matters. If you have the luxury of working from home indefinitely, expanding your search into more affordable areas is a no-brainer. However, folks tied to a commute and working in some of the more expensive metros may need to rethink their homebuying goals. If homeownership is a priority in the near term, finding a different job in order to relocate to a more buyer-friendly area may be a sacrifice worth making. This is particularly true if you’re early in your career or otherwise earning close to the median income. That said, if a down payment or qualifying for a mortgage is your main obstacle, first-time home buyer programs may be a way to get your foot in the door.

Increase in inventory is just a drop in the bucket
The number of homes listed for sale actually increased 2% quarter over quarter, on average, in the largest metro areas. This is a very small bump, particularly for this time of year, and one that’s skewed by increases in metros that are still operating in a significant supply deficit. Across the nation, active listings fell 5% quarter over quarter, at a time of year when homebuying season typically ushers in a wave of newly listed homes.

Read More
 

Related Stories

Affordability

Starter Homes Are More Affordable Than Renting (in Some Places)

Rents are soaring to all-time highs and rising at a record pace which, after doing the math, has made buying a starter home more affordable than renting in 24 of the 50 largest metro markets, analyzed by Realtor.com

Market Data + Trends

Mortgages Remain Within Affordable Levels Despite Rising Prices

Though home prices continue up, today’s homebuyers are not overextending themselves financially, unlike they did during the Great Recession. A…

Housing Markets

The Most and Least Affordable Cities for Renters

About 8.8 million Americans were behind on rent payments as of December last year, according to data from the Consumer Financial Protection Bureau…

Advertisement
Advertisement

More in Category




Advertisement
Advertisement

Create an account

By creating an account, you agree to Pro Builder's terms of service and privacy policy.


Daily Feed Newsletter

Get Pro Builder in your inbox

Each day, Pro Builder's editors assemble the latest breaking industry news, hottest trends, and most relevant research, delivered to your inbox.

Save the stories you care about

Lorem ipsum dolor sit amet lorem ipsum dolor sit amet lorem ipsum dolor sit amet.

The bookmark icon allows you to save any story to your account to read it later
Tap it once to save, and tap it again to unsave

It looks like you’re using an ad-blocker!

Pro Builder is an advertisting supported site and we noticed you have ad-blocking enabled in your browser. There are two ways you can keep reading:

Disable your ad-blocker
Disable now
Subscribe to Pro Builder
Subscribe
Already a member? Sign in
Become a Member

Subscribe to Pro Builder for unlimited access

Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.