Affordability and housing attainability are challenged in the current market where home prices and rates are elevated and inventory is slightly constrained. The path to homeownership is more difficult for single prospective buyers than couples, as illustrated in research conducted by Point2Homes.
According to the organization, the average to bridge the gap between an affordable loan and the average starter home price is two years for a couple and eight-and-a-half years for a single person. Point2Homes found, in 50 of the 100 largest U.S. cities, single people need between two and nine decades to save enough to cover the difference between what the bank will lend them and the price of a starter home, illustrating the reality of affordability challenges.
However, single buyers and couples are likely to have similar paths to homeownership in the more reasonably priced Midwest, where starter home prices are lower than the national average. In one-third of the country’s major cities, individuals can afford a mortgage equal to more than half of the local starter home price. Further, in 13 cities, a single person can afford an 80% mortgage—meaning an individual can budget and save for the remaining amount in three-and-a-half years or less, according to Point2Homes.
In Toledo, Ohio; Detroit; St. Louis; and Cleveland, a single person may require just nine to 11 months more than a two-person family to set money aside for a starter home. Similarly, single buyers in Memphis, Tennessee; Baltimore; Kansas City, Missouri; and Oklahoma City need less than a year and half more than couples to cover the difference between a bank loan and the price of a starter home. In each of these cities, individuals would need less than three years to save up to become homeowners, the lowest amount of time in the 100 cities analyzed by Point2Homes.
Conversely, in less affordable cities, the benefit of having a second income greatly improves attainability. Major markets in California are extremely challenging with single first-time buyers. In Anaheim, an individual earning the median income would need more than 87 years to save up and purchase a home in the city, nearly six decades longer than a couple pooling their savings. Thirteen California cities, as well as Boston and New York, have the biggest difference between years needed to save for homeownership among single buyers and couples.
For the purposes of its analysis, Point2Homes used data from the 2022 American Community Survey one-year estimates and adjusted for 2023 using the Bureau of Labor Statistics Wages and salaries increase. The research and analysis by Point2Homes on the challenges facing single buyers provides evidence why there has been a rise in non-romantic home buying partnerships in today’s housing market. According to research from JW Surety Bonds, 15% of Americans have co-purchased a home with a person other than their romantic partner.
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