{"id":5955,"date":"2020-12-07T11:25:27","date_gmt":"2020-12-07T16:25:27","guid":{"rendered":"https:\/\/www.realtyhop.com\/blog\/?p=5955"},"modified":"2024-01-10T10:58:08","modified_gmt":"2024-01-10T15:58:08","slug":"barrier-to-homeownership","status":"publish","type":"post","link":"https:\/\/www.realtyhop.com\/blog\/barrier-to-homeownership\/","title":{"rendered":"Here’s How Many Years It Takes to Save for A Home In Your City – 2024 Edition"},"content":{"rendered":"
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Homeownership is one of the best ways to build wealth. According to the U.S. Census Bureau, Americans who own property have a median net wealth nearly 75 times greater<\/a> than those who rent. However, owning a home is expensive.\u00a0<\/span><\/p>\n Home prices have been rising nationwide, making housing unaffordable in major cities. Despite recent signs of cooling thanks to the Fed’s policy around interest rates, more and more households, especially low- and middle-income households, are struggling to come up with funds to meet the 20% down requirement.<\/span><\/p>\n To better understand the financial barriers homebuyers across the country face, we at RealtyHop looked at the years required to save up for a down payment in the top 100 most populated cities in the U.S.<\/span><\/p>\n <\/p>\n <\/p>\n With a median list price of $1,200,000, Los Angeles<\/a> ranks as the city with the most significant barrier to homeownership. Assuming that an average L.A. family set aside 20% of their annual income \u2013 $15,249 or $1,271 a month \u2013 for the down payment on a home, it will take a whopping 15.74 years of savings for them to meet the loan requirement.<\/span><\/p>\n Miami<\/a> remains one of the most unaffordable cities in the nation this year. The gap between income and home prices worsened in the past few years as out-of-town buyers and investors continued to flock to the city. The median list price has risen to $615,000 in the past year. For local Miami families making a median income of $54,858, it will take 11.21 years to accumulate enough cash for a home.<\/span><\/p>\n Thanks to rising median household income and decreasing median list price, the barrier to homeownership slightly improved this year in New York City<\/a>. With a median list price of $839,500 and income of $76,607, it takes homebuyers, on average, 10.96 years to save a 20% down payment for a home.<\/span><\/p>\n Another Californian city made the top five this year. Despite having a considerably high median household income of $122,948 compared to other major cities, it still takes over 10 years for a typical family in Irvine<\/a> to accumulate enough cash to cover the down payment.<\/span><\/p>\n Hialeah<\/a> rounded out our top five this year as one of the cities with the worst barrier to homeownership. With annual savings of $9,906 per year and a median asking price of $480,000, it will take an average Hialeah family 9.69 years to qualify for a loan.<\/span><\/p>\n <\/p>\n Detroit<\/a> continues to rank as the city with the lowest barrier to homeownership in 2024. With a median list price of $85,000, it will take a typical family in Detroit 2.25 years to save up for the down payment if they save 20% of their household income each year.<\/span><\/p>\n Thanks to relatively low asking prices, homeownership in Cleveland<\/a> is still attainable for most. With a median home price of $116,250 and a median household income of $37,271, it will take a typical Cleveland family 3.12 years to meet the 20% down payment requirement.\u00a0<\/span><\/p>\n The median household income in Kansas City<\/a> currently sits at $65,256, considerably higher than that of other low-barrier cities included in this index. With a median asking price of $229,500 and an annual savings of $13,051, it will take Kansas City homebuyers 3.52 years to reach the 20% down amount.<\/span><\/p>\n In Milwaukee<\/a>, it takes, on average, 3.62 years for families to save up for a home. In a city where the median list price sits at $179,900, buyers can achieve their goal of homeownership relatively quickly.<\/span><\/p>\n Wichita<\/a> ties Milwaukee in our rankings this year. With a median household income of $60,712 and a median asking price of $220,000, it takes 3.62 years to accumulate enough cash to cover the 20% down payment required to enter homeownership.<\/span><\/p>\n <\/p>\n <\/a><\/p>\n California remains the most expensive state in America. RealtyHop’s 2023 Most Expensive U.S. Zip Codes study shows that more than half of the 100 most expensive zip codes are in California. While families in certain cities, such as San Francisco and Oakland, have higher incomes, home prices have also been pushed up due to higher living costs and demand.\u00a0<\/span><\/p>\n Of the 18 California cities included in this study, all have a barrier to homeownership over five years. Fremont<\/a> has one of the highest median household incomes across the country, at $169,023. Despite strong income levels, the barrier to entry remains high at 7.69 years, with a median list price of $1.3 million. Similarly, in Irvine, the median household income currently sits at $122,948, more than double San Bernardino’s. Families there, however, have to spend, on average, 10.02 years to satisfy the down payment requirements.<\/span><\/p>\n <\/p>\nKey Findings<\/strong><\/h2>\n
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The 5 Cities with the Biggest Barrier to Homeownership<\/strong><\/h2>\n
1. Los Angeles, CA<\/span><\/h3>\n
2. Miami, FL<\/span><\/h3>\n
3. New York, NY<\/span><\/h3>\n
4. Irvine, CA<\/span><\/h3>\n
5. Hialeah, FL<\/span><\/h3>\n
The 5 Cities with the Lowest Barrier to Homeownership<\/strong><\/h2>\n
1. Detroit, MI<\/span><\/h3>\n
2. Cleveland, OH<\/span><\/h3>\n
3. Kansas City, MO<\/span><\/h3>\n
4. Milwaukee, WI<\/span><\/h3>\n
5. Wichita, KS<\/span><\/h3>\n
A Closer Look at Homeownership Barriers in California<\/strong><\/h2>\n
Full<\/strong> Dataset<\/strong><\/span><\/h2>\n