Angelenos, congratulations: You are officially living in one of the worst metropolitan areas for first-time home buyers, according to a new study by Bankrate.com.
Of the 50 largest metropolitan areas studied, Los Angeles ranked 49th in affordability, 48th in occupancy factors, 39th in restricted housing market, as the supply of homes for sale in all the country has fallen to historically low levels during the COVID-19 and 30th pandemic. in security. But by contrast, LA ranked third in welfare and culture.
Los Angeles was rated the “worst subway for first-time shoppers,” followed by Las Vegas, Seattle, Riverside and San Jose.
According to Zillow, the seasonally adjusted home value typical of homes in the U.S. stood at $ 349,816 in May 2022, which includes the average level of housing. The value of homes has increased by 20.7% nationwide over the past year, he added.
To put it in context: the typical value of homes in Los Angeles is $ 1,007,124, Zillow added, with a 17.1% increase in home value over the past 12 months.
Widening the accessibility gap
But Los Angeles, Riverside and San Jose aren’t the only cities in California that are out of reach, especially for first-time shoppers. According to personal finance site Bankrate, 10 of the worst metropolitan areas for first-time home buyers are in California, including San Francisco, San Diego and Sacramento.
“The housing boom of the past two years has widened the accessibility gap between low-cost and high-cost metropolitan areas,” Jeff Ostrowski, a senior mortgage journalist at Bankrate, said in a statement.
“But with remote work becoming the norm for white-collar employees, it is possible to keep the highest salary while living in a cheaper area,” he added. “For this study, we not only looked at housing accessibility, but also a variety of other factors, such as local unemployment rates, travel times, crime rates, and public health.” .
The best places to buy a house
But there are some bright spots, if buyers are open to relocating, according to the survey.
Pittsburgh, for example, was the “best” subway for first-time home buyers, earning points for the accessibility, lack of watertightness, and security that marked the home. (House prices in Philadelphia rose 6.5% in the last 12 months to $ 233,563 in May 2022, Zillow Z,
To assess the tightness of the housing market, Bankrate analyzed the average number of days in the housing market for sale by March 2022, as provided by Realtor.com, and the annual change in the housing inventory until March 2022. (Realtor.com is owned by the same parent company as MarketWatch.)
Pittsburgh was followed by Minneapolis, Cincinnati, Kansas City and Buffalo as the best metropolitan areas for first-time shoppers. Bankrate also highlighted Philadelphia as a housing market that was not only more affordable than many western cities, but also ranked better for its relative security.
A myriad of sources
The survey used a variety of sources, including the U.S. Census Bureau, the U.S. Department of Labor, and data on violent crime and property crime published by the Federal Bureau of Investigation.
To calculate affordability, the researchers analyzed the typical income needed to qualify for a mortgage in each metropolitan area, based on the average home price in the first quarter of 2022, Attom Data Solutions reported; an initial payment of 10%; a 5% mortgage rate on a 30-year loan; in addition to a 25% mortgage debt / income ratio.
He also contrasted these figures with the latest U.S. Census Bureau estimates of average household income headed by people aged 25 to 44 in each metropolitan area and calculated the home ownership rate for to people aged 25 to 44 in each metropolitan area.
For wellness rankings, Bankrate used the 2020 Community Wellness Index published by digital health company Sharecare SHCR,
which examines access to health care, food, and community services, including libraries and churches.
The cultural ranking analyzes the number of arts and entertainment establishments and cultural institutions per capita, based on Bankrate’s analysis of data from the U.S. Census Bureau.