Home prices continued to rise at an unobtainable rate during the third quarter, making it increasingly difficult for first-time homebuyers to enter the market. NerdWallet’s First-Time Homebuyer Metro Affordability Report for the third quarter says median home prices are 5.2 times higher than the typical first-time buyer income. Finding a home within three times of a salary has long been a measurement of affordability. Low mortgage rates were once helping bolster first-time buyers, but the shriveled housing inventory’s effects outweigh whatever help low rates could provide, says NerdWallet. In April, 36% of home purchases were made by first-time buyers. That share dropped to 31% in September.
Though homes became more expensive across nearly all of the most populous metropolitan areas, those locales deemed the most affordable in the second quarter topped the list again: Pittsburgh, the most affordable, where homes were typically listed at 3.3 times median first-time home buyer income in the third quarter, followed by St. Louis (3.3), Buffalo, New York (3.6), Hartford, Connecticut (3.6) and Cleveland (3.7).
Likewise, five metros in California remained the areas most out of reach for first-timers: Los Angeles, where homes were 12.1 times the median first-time buyer income, followed by San Diego (8.6), San Jose (7.9), San Francisco (7.4) and Sacramento (6.8).
Click here for a table containing affordability data for all 50 metros analyzed.
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