As home prices continue to rise, a starter home in a big city seems more like an unattainable myth than a reality.
However, according to a recent analysis by the painting service company Five Star Painting, first-time home buyers can be found in 15 of the largest cities in the United States without’ y $230,000 on average. That amount is well below $431,000, the median home price in the United States, according to the most recent data from the Census Bureau.
Starter homes are usually relatively modest, and affordable for first-time home buyers or average those with low incomes. In this context, the study defines a starter home as a single-family home, attached to another or a condominium of 1,850 square feet or less. Mobile homes, land, and multi-family homes are excluded from the analysis.
Assuming buyers pay 10% of the home’s value, they would need an income of around $56,500, not including other debts, to purchase a $230,000 home, according to the online real estate firm. from Zillow. Of course, home prices vary by region, so buyers with lower incomes may be able to afford an affordable home in some areas.
Based on Redfin real estate listings for the 50 largest cities in the United States, the following 15 markets had lower median prices for a starter home in August 2023:
- Detroit, Michigan: $83,500.
- Cleveland, Ohio: $109,650.
- Memphis, Tennessee: $142,450.
- Milwaukee, Missouri: $142,900.
- St. Louis, Missouri: $149,500.
- Hartford, Connecticut: $164,474.
- Birmingham, Alabama: $166,055.
- Buffalo, New York: $179,900.
- Kansas City, Missouri: $187,950.
- Louisville, Kentucky: $199,615.
- Baltimore, Maryland: $202,289.
- Indianapolis, Indiana: $211,517.
- Pittsburgh, Pennsylvania: $214,589.
- Cincinnati, Ohio: $219,900.
- Oklahoma City, Oklahoma: $227,705.
Why do some regions have better home prices?
Detroit’s housing market has recovered somewhat since the city filed for bankruptcy 10 years ago, but home prices remain below average for the rest of the country.
The decline in home prices in Detroit is due to several factors, such as population decline and the relatively high number of distressed home sales – that is, when a homeowner is forced to sell their property because can’t afford the mortgage payments.
Like Detroit, Cleveland is a so-called Rust Belt city with a population that has been in decline for a long time. Like most US cities over the past three years, housing prices in Cleveland have risen but remain below the US average.
Generally, the cheapest accommodation is found in small towns that are not large coastal centers. On that list are Midwestern urban centers like Indianapolis, but also Southern cities like Birmingham, Alabama.
In contrast, first-time home buyers in San Francisco Tost $999,000 on average., the study revealed, making it the most affordable place to own a home. At that price, it’s not r conscious home, because a buyer with a median income of $74,580 in the United States can’t afford it without saving a lot of money.