It’s Now Much Harder for First-Time Buyers to Afford a Home Here

Home prices are heating up again in many markets. That fact is making new digs less affordable for many people, including millions of first-time homebuyers.

In June, the average starter home nationwide sold for a record $243,000. Today’s first-time homebuyers now need an average annual income of $64,500 to afford a typical U.S. “starter” home, according to real estate company Redfin. That is an increase of 13% — or $7,200 — from one year ago.

A lack of inventory is largely responsible for the price increase, according to Redfin.

In some markets, the income needed to buy a starter home has surged. Following are the places where first-time homebuyers need a big raise, a second income or some other source of cash just to get a foot in the door of the American dream.

1. Fort Lauderdale, Florida

Median sale price for starter homes in this metropolitan area: $220,000

Annual income needed to afford the typical mortgage payment on the median-priced starter home: $58,308 (an increase of 27.6% since last June)

Prices are going up for first-time homebuyers in paradise. Perhaps it’s worth waiting until you are more established before moving here: Fort Lauderdale remains one of “The 15 Best Places To Retire in America.”

2. Miami

Median sale price for starter homes in this metropolitan area: $300,000

Annual income needed to afford the typical mortgage payment on the median-priced starter home: $79,510 (an increase of 24.8% since last June)

Miami is one of America’s most exciting and enticing cities. It’s also one of the “5 Places Where Home Prices Won’t Stop Climbing.”

3. Newark, New Jersey

Median sale price for starter homes in this metropolitan area: $335,000

Annual income needed to afford the typical mortgage payment on the median-priced starter home: $88,787 (an increase of 21.1% since last June)

Not only is it tougher to afford a starter home in Newark, but as we recently reported, luxury home prices that are falling across many parts of the country are rising fast in Newark.

See Also:

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Other increasingly pricey markets for first-time buyers

Following are the rest of the cities where first-time homebuyers need at least a 15% rise in income to afford a starter home compared with the income needed a year ago:

• Milwaukee: $46,381 income (20.6%)
• Montgomery County, Pennsylvania: $82,161 (19.9%)
• Jacksonville, Florida: $63,608 (19.2%)
• West Palm Beach, Florida: $64,933 (19%)
• San Antonio: $55,657 (18.7%)
• Columbus, Ohio: $48,501 (18.7%)
• Indianapolis: $42,406 (17.6%)
• Cincinnati: $42,406 (17.6%)
• Providence, Rhode Island: $86,666 (17.4%)
• New Brunswick, New Jersey: $87,461 (16.2%)
• Charlotte, North Carolina: $62,283 (15.4%)
• Virginia Beach, Virginia: $59,633 (15.4%)

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