The 10 Cities Where Renters Can Become Homeowners Fastest

Young couple buying their first home
goodluz / Shutterstock.com

This story originally appeared on SmartAsset.

Whether due to societal changes or lack of savings, many Americans have delayed homeownership. According to a National Association of Realtors report, the median age of first-time homebuyers in 2019 was 33 years old, three years older than it was a decade prior.

Moreover, a Zillow analysis shows that the typical first-time homebuyer now rents for six years before settling down in one place, more than twice the amount of time needed in the early 1970s.

These increases in age and average time spent renting by today’s first-time homebuyer raises an important question for many: How long does it take to become a homebuyer? In large part, this is determined by your salary, savings rate and the price of the home you hope to buy.

In this study, SmartAsset examined how long it takes to become a homeowner, on average, in the 100 largest U.S. cities, accounting for a 20% down payment on the median-valued home in each place. We also calculated the estimated time to homeownership in the 15 largest U.S. cities, assuming a 10% or 20% down payment.

To find cities where it takes the least average time for renters to become homeowners, we considered five metrics, using data from the Census Bureau’s 2018 one-year American Community Survey except where noted:

  • Median household income.
  • Effective income tax rate. Data comes from SmartAsset’s income tax calculator.
  • Median annual rent.
  • Median home value.
  • Average closing costs. Data is from SmartAsset’s closing costs calculator and is calculated at the county level.

Using median household income, effective income tax rate and median annual rent, we calculated income after taxes and rent in each city. We assumed households currently renting would be able to save 40% of their post-tax and rent income annually.

Then, using median home value and average closing costs, we calculated the upfront costs for a home. We assumed a 20% down payment for the 100 largest U.S. cities and included both a 10% and 20% down payment as part of our considerations for the 15 largest cities. We divided the upfront costs for a home by 40% of post-tax and rent income to find the average amount of time to homeownership for a renter in each city.

Following are the cities where it takes the least time for renters to become homeowners.

10. Arlington, Texas

Arlington, Virginia
Sean Pavone / Shutterstock.com

Average upfront home costs in Arlington, Texas, are the highest of any city in our top 10, though households are generally able to save for these costs in less than three years because of high average incomes and low taxes.

Census Bureau data from 2018 shows that the median household income in Arlington is almost $63,100. After taxes and rent, the average household has about $40,800 left over.

9. El Paso, Texas

El Paso, Texas
BrianWancho / Shutterstock.com

Renters in El Paso, Texas, may be able to purchase a home in a little less than 2½ years. A 20% down payment on a median-valued home in El Paso is about $26,200.

With average closing costs at about $3,100, a household needs a total of roughly $29,300 to put a down payment on a home.

8. Cleveland

Cleveland, Ohio
Pedro Gutierrez / Shutterstock.com

Average upfront home costs in Cleveland are the second-lowest of any city ranking in our top 10, at about $17,500.

With the median household earning almost $30,000 annually and potentially saving about $7,200 every year, the estimated time to homeownership in Cleveland is 2.43 years.

7. Omaha, Nebraska

Bob Kerrey Pedestrian Bridge in Omaha, Nebraska
Melissa A. Woolf / Shutterstock.com

The median home value in Omaha, Nebraska, is relatively expensive, the second-highest of any city in our top 10 — $163,400, according to 2018 Census data.

Though this higher value indicates a larger down payment, residents in Omaha may not need to wait long to make the jump from renting to owning.

The average household income after taxes and rent is almost $38,500. Assuming 40% of this can be saved annually, the average renter could purchase a home in 2.33 years.

6. Wichita, Kansas

Wichita, Kansas
Sean Pavone / Shutterstock.com

Wichita, Kansas, ranks sixth out of a total of 100 cities for which we analyzed data in our study.

The median household income in Wichita is almost $51,100, and median home value is slightly less than $140,000. Using those figures, we found that the average household may be able to afford the upfront costs for a median-valued home in the city in 2.31 years.

5. Laredo, Texas

Laredo, Texas
digidreamgrafix / Shutterstock.com

Laredo is the second of four Texas cities that rank in the top 10 of our study. The average household may be able to save about $12,400 annually.

Assuming average upfront home costs of roughly $28,100, the estimated time to homeownership is 2.26 years.

4. Corpus Christi, Texas

Corpus Christi, Texas
Roschetzky Photography / Shutterstock.com

Census estimates from 2018 show that the median household income in Corpus Christi, Texas, is about $56,600. Additionally, the median home value there is $146,000.

Using those figures along with the previously described methodology, we estimate that the average time to homeownership in Corpus Christi is less than two years and three months.

3. Toledo, Ohio

Toledo, Ohio
T.Slack / Shutterstock.com

We estimate that the average time to homeownership for renters in Toledo, Ohio, is 2.16 years.

The 2018 median household income in Toledo was about $35,900. Though this is below the national average, homes in Toledo are relatively affordable — with a median home value of $79,900 — making homeownership more possible for many residents there.

2. Detroit

Detroit, Michigan
Stephanie Kenner / Shutterstock.com

Detroit ranks second on our list of the cities where it takes the least time for renters to become homeowners.

The relatively quick time to homeownership for renters in Detroit is in large part a product of low home prices in the city. Census data shows that the median home value in Detroit was $51,600 in 2018 — the lowest of any city in our study.

1. Fort Wayne, Indiana

Fort Wayne, Indiana
Travis Eckert / Shutterstock.com

Of the 100 largest U.S. cities, Fort Wayne, Indiana, ranks as the city with the lowest estimated time to homeownership.

Census data from 2018 shows that the median household income in Fort Wayne is about $48,700. After taxes and rent, the average household has about $31,200 left over in disposable income.

Assuming 40% of that figure is saved annually, the average household could afford the upfront costs for a home in about two years.

Estimated time to homeownership in the 15 largest U.S. cities

Columbus, Ohio
Randall Vermillion / Shutterstock.com

Beyond uncovering the cities where it takes the least time for renters to become homeowners, we examined the estimated time to homeownership in the 15 largest cities in the U.S.

Due to the fact that not everyone puts down 20% on a home, we also considered how the estimated time to homeownership changes assuming a 10% down payment on the median-valued home.

Across the 15 largest cities, Columbus, Ohio, has the lowest estimated time to homeownership. The average household could afford the upfront costs of buying a home there in 2.72 years if putting down 20% on a house.

Alternately, if the average household in Columbus put down only 10% on the median-valued home, the household could achieve homeownership in less than a year and a half.

Large Texas cities also rank well. In Fort Worth, San Antonio, Houston and Dallas — each of which rank within the best six cities out of the total 15 — the average household can afford the upfront costs of buying a home, assuming a 20% down payment, in less than 3½ years on average.

Lowering the upfront costs by assuming a 10% down payment and average closing costs, the estimated time to homeownership is less than two years in all four cities.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

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