Home >> Daily Dose >> Affordability Growing for First-Time Buyers
Print This Post Print This Post

Affordability Growing for First-Time Buyers

New analysis from First American Financial found that low mortgage rates and rising household income for renters during Q3 2019 causing the rental home-buying power to increase 14% in one year. 

The average renter could afford 55% of the homes that were for sale on the market during Q3 2019. 

First American also examined how many homes the average renter could afford in each of the 50 states and found they could afford an average-priced home in 30 of the 50 largest markets—an increase from the 24 in Q2 2019. 

Oklahoma City was the most affordable market, with the average renter able to afford 74% of homes on the market. Louisville, Kentucky, was a closed second at 73%and Memphis, Tennessee, was affordable for 72% of renters. 

Other markets on the list include: Birmingham, Alabama (71%); Kansas City, Missouri (71%); Pittsburgh (70%); Tampa Bay, Florida (69%); Atlanta (68%); Indianapolis (68%); and St. Louis (66%). 

“In 2019, lower mortgage rates and rising income created broad-based affordability gains across the nation. The timing for this affordability surge is a boost to the housing market, as more and more millennials decide they want to be homeowners,” said Odeta Kushi, author of the piece and Deputy Chief Economist for First American. “More than half of all mortgage loans originated by the government-sponsored enterprises (Fannie Mae and Freddie Mac) are now for first-time homebuyers (most likely millennials).”

First American said the average renter in Oklahoma City had a household income of $37,070. The same renter is Los Angeles—the least affordable city in the nation—could afford less than 2% of homes for sale in Q3 2019. 

The median home price in Los Angeles during Q3 2019 was $645,666 while the average income for a renter was $50,592. The home-buying power for a renter in Los Angeles was $314,961 and they could afford just 6% of homes sold in Los Angeles during the quarter. 

About Author: Mike Albanese

A graduate of the University of Alabama, Mike Albanese has worked for news publications since 2011 in Texas and Colorado. He has built a portfolio of more than 1,000 articles, covering city government, police and crime, business, sports, and is experienced in crafting engaging features and enterprise pieces. He spent time as the sports editor for the "Pilot Point Post-Signal," and has covered the DFW Metroplex for several years. He has also assisted with sports coverage and editing duties with the "Dallas Morning News" and "Denton Record-Chronicle" over the past several years.

Check Also

Mortgage Rates Climb to 23-Year High Point

Freddie Mac reports that mortgage rates reached levels last seen in December 2000, as the 30-year fixed-rate mortgage rose 12 basis points week-over-week and low supply continues to create affordability challenges for prospective buyers.