Because housing costs have doubled since last year, the market for ‘starter homes’ (those for first-time homebuyers) has become inaccessible to most people. people in all but four major US cities, according to a study published by real estate site Point2.
Those cities are Detroit; Tulsa, Okla.; Memphis, Tennessee, and Oklahoma City.
As previously mentioned, starter homes are generally considered the first home a family can buy, so they tend to be smaller and cheaper than others. houses that are for sale. However, it is increasingly difficult to find an affordable house of this type.
Point2 says that starter homes are those valued in the bottom third of all available homes in a given market. To measure affordability, the study follows the common personal finance rule that a mortgage payment should not exceed 30% of the owner’s monthly gross income.
Below, we give you more details about the cities where the average citizen can find an affordable house.
1. Detroit
-Average Annual Income: $27,002 dollars
-Income needed to pay for a house down: $19,103 Dollars
–Average Initial Home Price: $48,129 dollars
2. Tulsa, Oklahoma
-Average Annual Income: $ 30 ,039 dollars
-Income needed to pay a initial house: $29,521 dollars
-Average Initial Home Price: $ 95,481 Dollars
3. Memphis, Tennessee
-Average Annual Income: $30,093 dollars
-Income needed to pay for a house down: $27,966 dollars
-Average Initial Home Price: $87,174 dollars
4. Oklahoma City
– Average Annual Income: $37,211 dollars
-Income needed to pay for a house down: $37,071 Dollars
–Average Initial Home Price: $126,442 dollars
The reason why houses have increased in price is that there is a housing shortage since before the COVID pandemic-19, in addition to the costs of construction materials have also increased its price.
Lawrence Yun, Chief Economist at the National Association of Realtors, says home prices have risen by nearly 27%, while people’s income has not increased by 30%.
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