Pittsburgh Leads Ranking of Cities Where Renters Have the Best Chance to Become Homeowners
Pittsburgh, a city in western Pennsylvania, leads a list of cities where renters, even those with lower incomes, have the best chance to become homeowners, according to a ranking by First American.
Nationally, renters in lower-income households saw their house-buying power increase by 10% in the fourth quarter of 2020, helped by cheaper mortgage rates, but the share of affordable supply declined to 27% from 31%, according to the title insurer’s First-Time Home Buyer Outlook Report.
Home prices have surged during the pandemic, capped by a 15.8% annualized jump in the median U.S. home price in February, the National Association of Realtors said in a March 22 report. All regions of the country posting double-digit price gains compared with a year earlier, the NAR data showed.
That has strained affordability for many first-time buyers, even as low mortgage rates helped more families to qualify for mortgages. The average U.S. rate for a 30-year fixed mortgage fell to an all-time low of 2.65% in January’s first week helped by a Federal Reserve bond-buying program aimed at supporting the economy.
While many areas of the country have markets that are out of reach for lower-income households, some cities still have supplies of affordable homes, said Odeta Kushi, First American’s deputy chief economist.
“There are cities where the dream of homeownership for lower-income renters may be more attainable than many realize,” Kushi said.
In Pittsburgh, 62% of homes were within a renter’s house-buying power, followed by Oklahoma City, at 57%, Kansas City, Missouri, at 48%, Louisville, Kentucky, at 44%, and Columbus, Ohio, at 44%, according to the report.
The cities where lower-income renter households had the smallest share of affordable homes in the U.S. were:
- Los Angeles: 0%
- San Francisco: 1%
- San Jose, California: 2%
- Providence, Rhode Island: 3%
- Sacramento, California: 3%
“A national snapshot of housing affordability is insufficient given the old adage that real estate is local,” the report said.