Buying a home has been difficult in 2023, especially after mortgage rates soared past 8% and home prices surged due to a lack of inventory in the market.
Despite mortgage rates falling to 6% in the past weeks, homeownership may still be a far-fetched dream in some U.S. states. In a January report, RealtyHop looked at the number of years it would require an average American household to save up for a down payment. The study analyzed homeownership barriers in the 100 most populated cities in the country.
1. Los Angeles, California
Los Angeles topped the list as the city with the most significant barrier to homeownership. The study found that it would take an average family living in the state about 15.74 years to save enough funds for a 20% down payment and meet the requirement of a conventional loan.
As of December 2023, the median listing home price in Los Angeles was $1.2 million, marking a 16.1% year-over-year increase, per Realtor. The median home sale price was $949,500.
2. Miami, Florida
Miami remains one of the most unaffordable cities in the country, with the median list price rising to $615,000 in the past year. Households in the city earn a median income of $54,858, which means it may take them 11.21 years to accumulate enough funds to qualify for a conventional loan.
3. New York, New York
New York ranked third among all cities with the highest barriers to homeownership. Despite seeing improvements this year, the median listing price remains around $839,500, while the average household income sits at $76,607. Per the analysis, American households earning a median income would need 10.96 years to save up a 20% down payment for a home.
4. Irvine, California
Irvine is the second Californian city to make the list. The median household income in the city is $122,948, higher than incomes in other major cities. However, the study found that it will still take the average American household 10 years to accumulate enough cash for a down payment.
5. Hialeah, Florida
Households living in Hialeah typically have annual savings of about $9,906 per year. However, with the median asking price of $480,000, the study noted that it will take the average family 9.69 years to qualify for a conventional loan.
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