First-Time Homebuyers Found No Relief From Rising Prices in Q4 2021

After a slight uptick in the number of home listings in the third quarter of 2021, first-time homebuyers suffered another hard blow in the fourth quarter of the year with limited affordability caused by a year-long continuation of low supply. Listings fell 14% in the fourth quarter, and homes in the nation’s 50 largest metros were listed at 5.5 times median first-time home buyer income and 5.3 times across the nation as a whole, NerdWallet reports.

First-time buyers struggled the most in the wake of record high home prices and a lack of starter inventory, but metros like Pittsburgh and Cleveland offered some relative affordability.

The most affordable metros for first-time buyers remained in the Rust Belt and Midwest. Detroit joined this lineup, nudging out Minneapolis and Baltimore. Inaugural buyers in the fourth quarter would see their money go the furthest in Pittsburgh, where homes were listed at 2.9 times median first-time buyer income, Cleveland (3.1), St. Louis (3.3), Buffalo, New York (3.5), and Detroit (3.5).

For the first time since early 2020, the least affordable metros included one outside of California, as Miami had a similar affordability ratio to Riverside. Los Angeles, perennially at the bottom of the affordability list, found homes priced at 11.2 times first-time buyer income, compared with 12.1 last quarter. Others at this end of the list include San Diego (9.2), San Jose (8.3), Sacramento (7.7), Riverside and Miami, both 7.6.

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