As millennials reach the age where they may be considering buying a home, the housing market can seem a little daunting, but some cities have more good opportunities for first-time buyers than others.
The homeownership rate for individuals under the age of 35 was 35.4 percent in the first quarter, down from 36.2 percent in 2014, according to data from the U.S. Census Bureau. The homeownership rate among young Americans fell nine percentage points between 2005 and 2014.
Meanwhile, the median sales price of a new home in the U.S. as of April was $342,200, according to government data.
The picture may look bleak for young Americans, who are also dealing with mounting student loan debts, but there are some cities where a larger slice of homes are within reach for first-time buyers.
Insurance firm First American put together a list of the most affordable places for first-time buyers, based on how mortgage rates, renter income levels and property taxes influence the amount a person could buy. They examined data across the country’s largest 44 cities.
Here’s a look at the results:
In Memphis, first-time buyers would be able to afford about 71 percent of homes. The median renter has an income of $37,130 and house-buying power of $202,015.
That same individual in Los Angeles, would be able to afford less than two percent of homes that are for sale.
Memphis has been named one of the cheapest places to live in the U.S. – ranking fourth on Kiplinger’s 2019 list.
Oklahoma City, the capital of the state, is also one of the most affordable for first-time buyers. As in Memphis, the median renter would be able to afford 71 percent of homes.
According to data from real estate website Zillow, the median home value in Oklahoma City is $130,200. The median price of homes currently listed is $189,900, but the median price of homes sold is $148,900.
Oklahoma City ranked 13th among the cheapest places to live this year.
Pittsburgh ranked third in terms of affordability for first-time buyers, where the median renter could afford about 69 percent of available homes.
In Pittsburgh, the median price of homes sold is $171,100 – compared to the median list price of $224,400.
In Atlanta, the median renter could afford 66 percent of available homes.
The median home value in the city is $259,700, according to Zillow. But the median price of homes that sold is $230,400 – significantly less than the median list price of $339,500.
In Cincinnati, too, the median renter could afford 66 percent of available homes.
The median price of homes that sold as of April was $162,000, while the median home value was about $144,400.
Rounding out the top 10 were: Kansas City, Missouri; Tampa, Florida; Detroit, Michigan; St. Louis, Missouri and Chicago