Here's where an entire year's salary won't get you a down payment

[mahatmakanejeeves]

Last edited Tue Apr 18, 2017, 04:33 PM - Edit history (1)

Here’s where an entire year’s salary won’t get you a down payment

Published: Apr 15, 2017 11:08 a.m. ET



When it comes to barriers to entry to the housing market, the down payment can feel more like a pole vault for many Americans, especially those stuck paying ever-pricier rent payments every month.

A new analysis from Zillow found that 68% of renters consider the down payment the biggest obstacle to becoming a homeowner. Zillow crunched some numbers for MarketWatch to demonstrate how much a 20% down payment costs in several major metros, relative to the median home prices and incomes in each.

Nationwide, 67% of the average annual income is needed for such a down payment, but as with everything in real estate, the local differences are stark. In the hottest housing markets of California, the coastal West, and New York City, it can take all of the typical annual income and then some, while in parts of the Midwest it’s half.

The metro area that comes closest to the national median of 67% is Minneapolis-St. Paul, at 66%. Dallas, Philadelphia, Baltimore, and Tampa are also clustered around that middle range.
....

Andrea Riquier reports on housing from the Washington bureau of MarketWatch. Follow her on Twitter @ARiquier.

[Warpy]

1. When I scared the hell out of my folks

by piling into a rented moving truck and heading west by myself, I ended up in NM. I'd been out two years earlier and had rented a car and driven all over the area and decided the high desert was the best place for me. My folks couldn't believe I hadn't kept going to endless summer in southern California.

Well, THIS is why. It was just as impossible 20+ years ago to get into the housing market there. I'd have been as stuck as I was in Boston, paying exorbitant rent in a crummy neighborhood with no hope of anything better, ever, because wages were lagging so far behind inflation.

Flyover country is much better for people who can do math.