No one can afford to own a home in major US cities
The Future. There’s no place like home — not one that most Americans can afford, anyway. Homes are so pricey that in the 50 most expensive US cities, the average homebuyer will have to save for over a decade before they can even afford the down payment on a house.
Patience, Millennial Padawan
Fast Company examined city-by-city homeownership rates and the average number of years residents would need to save to afford a down payment.
- The three most expensive cities for homebuyers are LA, SF, and NYC. Prospective homebuyers need 12 years’ worth of savings for a down payment in LA and 10 years’ worth in the other two.
- New York is the state with the lowest rates of home ownership, thanks to NYC. And California’s close behind, with low ownership dispersed all throughout the Golden State’s major cities.
- The Fed’s interest rate hikes are largely to blame. These drove double-digit increases in median home prices in 80% of 185 metro markets in 2022 alone.
Inflation is starting to slow down, but only in response to rate hikes — which are directly and positively correlated with rising home prices. Since the Fed has more of these planned, homes will get more expensive before they get cheaper.
In the meantime, communal home-buying may be the way to go.