A new study finds that a whopping 61 percent of renters across the United States’ biggest metropolitan areas are priced out of buying their very own home – even if they spent years saving up for a down payment.
Porch.com, a website that connects homeowners with local home improvement contractors, collected data that shows the average home in America costs seven times the average household income.
The data found that out of 13 metro cities, at least 90 percent of people currently renting can’t afford to buy their own home. Ten of those cities alone are all in the state of California, unsurprisingly.
Currently, only 4% of renters in Los Angeles can afford to own a home in the city.
In total, 260 of the largest metropolitan areas that were analyzed showed that home prices far exceeded what renters could afford.
Meanwhile, the study discovered that even if renters were able to save for a down payment on an average-priced home in their city, for many it would mean that mortgage repayments would exceed 30% of their household income.
“Because the housing market continues to be incredibly tight, it’s going to mean that first-time homebuyers in the millennial and Gen Z generation will likely be stuck in the rental game for a longer period of their lives than previous generations,” a Porch spokesman told The Post.
For most renters, homeownership is out of financial reach in three out of four metropolitan (71%) areas in America, according to Porch.
Some of the other least affordable cities are coastal and come from the states of Hawaii and Massachusetts, in addition to Colorado.
In metro cities across New York, New Jersey, and Pennsylvania, an estimated 81% of renters are unable to afford to buy a house.
In the cities of Washington, DC, Raleigh, North Carolina, and Tucson, Arizona, about 70% were priced out, the data shows.
But a continuing struggle for ownership is also leading to a struggle in rentals.
“The housing shortage will have a ripple effect that will also impact the availability of rentals, heightening demand and driving rental prices up and perhaps preventing lower-income renters from living in the neighborhood they desire,” the spokesperson added. “These are challenging circumstances for young Americans looking to establish roots – and nothing quite like those that prior generations have faced.”
Porch attributes the issues of a steadfast housing market on the millennial generation — who make up the nation’s largest housing — who make up about 72 million people.
“They are placing considerable pressure on the housing market as they look to enter,” the spokesperson explained. “Interest rates have been incredibly low throughout the pandemic, and stimulus money has been put in people’s pocket as well, helping them afford a down payment or the earnest money they need to secure a mortgage. Combine this with disruptions to the supply chain and a labor shortage in the homebuilding industry, and you can begin to see some of the reasons why there’s a housing crisis.”
