Matt Schulz (pictured top), chief consumer finance analyst at LendingTree, said in the highest-cost markets, first-time buyers have very little room to work with when trying to become a homeowner. The practical solution may involve looking at other markets, if their situation allows, which could be an advantage for brokers licensed in multiple states.
“People for whom owning a home is a major priority may have options in other parts of the country if they are willing to relocate,” Schulz told Mortgage Professional America. “And today with so much remote work and that sort of thing, it feels like it’s a little more of an option than it was certainly a decade ago. There’s such a gigantic difference among the states that depending on your individual circumstances, you may be able to find a place that would work for you.”
Both coasts among least affordable
Rhode Island is the least affordable state for non-homeowners, according to the report, with just 17% able to afford the average $350,000 starter home. The median household there earns $56,581 less than the income needed to buy one.
California presents the largest affordability gap by dollar amount. The median non-homeowner household earns $67,776 less than the $140,676 income needed to afford the average $482,000 starter home, and just 21% can do it.
Schulz said East Coast cities like Boston and Providence have little room to grow against persistent demand, making the math nearly impossible for starter homebuyers.
