Here are the most and least affordable cities for first-time homebuyers
California suburbs from a drone point of view. (Getty Images)
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(TheRealDeal) — Are you an Angeleno looking to fulfill your dream of owning a home? The odds are stacked against you.
A new study from NerdWallet examined home affordability across the U.S. during the second quarter. Los Angeles is easily ranked as the least affordable city for first-time homebuyers, with an affordability ratio of 13.0. In addition, the estimated median income was $82,350, while the average median list price was $1,072,203; Los Angeles has finished last every quarter in NerdWallet’s ranking – five times – likely skewed by some of the higher-priced home listings.
The ratio is calculated by comparing the estimated median income of householders ages 25 to 44 as of March with the average monthly median list prices in the metro for the second quarter.
California had the lion’s share of least-affordable metros. San Diego finished second-last (9.2), followed by San Jose (8.4), San Francisco (7.6), and Sacramento (7.5). Rounding out the bottom 10 are Riverside, California (7.1), Salt Lake City (6.7), New York City (6.6), Miami (6.6), and Denver (6.6).
On the opposite end of the spectrum, St. Louis and Pittsburgh were the most affordable metros, each sporting an affordability ratio of 3.5. Cleveland followed them at 3.6, Buffalo, New York (3.8), and Baltimore/Hartford, Connecticut, tied for fifth (3.9). Rounding out the top ten in affordability for first-time homebuyers was Minneapolis at seventh (4.0) and a five-way tie for eighth with Louisville, Indianapolis, Detroit, Philadelphia, and Columbus, Ohio (4.2).
Chicago finished just behind the top metros with a 4.3 affordability ratio for first-time home buyers.
The study, which looked at the 50 most populous metro areas in the country, found that home affordability fell from the previous year; homes were listed at 5.5 times the median income for first-time homebuyers in Q2 versus 5.2 times in Q2 of 2020.
Active listings across the 50 metro areas fell 48 percent year-over-year in the second quarter, putting further pressure on first-time homebuyers. Those listings include a 68 percent drop in Tampa, a 66 percent drop in San Antonio, and a 66 percent decline in Dallas.
