RealtyHop conducted an analysis to detect which cities take the longest to save for a home, finding that in Detroit, homebuyers, on average, spend 2.56 years saving for a down payment, making it the city with the biggest barrier lower for home ownership.
In contrast, buyers in Glendale, California, need up to 15.10 years of saving to achieve their goal. Families in Glendale must save 20% of their income to own a home and qualify for a loan, with a median household income of $74,488.
The pandemic and the subsequent housing boom have made homeownership more unattainable than ever. More and more households, especially low- and middle-income households, are struggling to obtain funds to meet the 20% down payment requirement.
To better understand the financial barriers facing homebuyers across the country, RealtyHop analyzed the barrier to homeownership in the top 150 US cities by population. The realtor calculated the average sale price by city using more than 1.8 million residential sales listings between July and December 2022.
To narrow the scope of the study and better reflect the prices American households expect to see when buying, the following property types were included in calculating the median: condominiums, cooperatives, single-family homes, and townhomes.
To calculate the years needed to save for a down payment on a home, RealtyHop collected median household income data by city, assuming that a household saves 20% of its annual gross income each year. He then calculated the years required using 20% of the median sales price (down payment) and the amount saved per year.
The 5 cities with the lowest barrier to home ownership are:
Detroit, MI
In Detroit, homebuyers, on average, spend 2.56 years saving for a down payment. With a median listing price of $88,900, families looking to purchase property in this area can do so while earning a median salary of $34,762.
Wichita, Kansas
Wichita recorded the most affordable housing market in January 2023, with properties entering the market with an average list price of $150,000. A family looking to buy in Wichita will only need to spend 2.66 years saving for their $30,000 down payment, with a median income of $56,374.
Toledo, OH
Homebuyers in Toledo must save $8,334 over 2.83 years to pay a down payment on a home. With median home prices of $118,000, potential buyers will need a 20% down payment of $23,600.
Akron, OH
Here families take an average of 2.97 years to save for a house. In a city where the median listing price is $125,000, buyers can achieve their goal of homeownership relatively quickly and with a median income of $42,129.
Fort Wayne, IN
Fort Wayne rounded out the list as the fifth lowest barrier to homeownership. With a median household income of $53,978 and a median sales price of $169,000, it takes 3.13 years to save for a home.
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