However, some markets offer more opportunity for median-income consumers to purchase a property in their price range.
“While expensive markets like San Francisco, Los Angeles and Boston are attractive destinations for many reasons, there are attractive alternatives for millennial first-time homebuyers,” Odeta Kushi, deputy chief economist at First American, said in the report. “Smaller cities such as Oklahoma City, Louisville, Ky., or Memphis, Tenn., are ‘affordability friendly’ because the median renter’s house-buying power in these cities allows first-time home buyers to consider a much larger selection of homes to buy.”
For the report, First American examined the buying power of first-time homebuyers in the 50 largest metropolitan areas in the country. The analysis is based on median renter income versus the income needed to purchase a median priced home, accounting for 30-year fixed mortgage rates, property taxes, mortgage insurance and a 5% down payment.