Experts agree that buying a home can be a great way to build wealth, but achieving that goal can be challenging.
In a January report, RealtyHop looked at the number of years it takes to save up for a down payment in the 100 most populated U.S. cities.
RealtyHop collected the median household income from the U.S. Census Bureau, assumed that a household saves 20% of its annual gross income each year and then calculated the number of years it takes to save up for a down payment using 20% of the median asking price (the cost of a typical down payment) and the amount saved annually.
5 U.S. cities with the highest barriers to homeownership
- Los Angeles
- Miami
- New York
- Irvine
- Hialeah
Los Angeles ranked as the city with the highest barrier to homeownership. It takes 15.74 years for an average family in L.A. to save enough funds and qualify for a conventional loan, according to the report.
Los Angeles, California ranked as the city with the highest barrier to homeownership in the U.S., according to RealtyHop.
Alexander Spatari | Moment | Getty Images
In December 2023, the median listed home price in Los Angeles was $1.2 million, trending up 16.1% year-over-year. The median home sold price was $949.5K, according to Realtor.com.
L.A. is considered the Southern California region’s financial, commercial, and cultural center.
5 U.S. cities with the lowest barrier to homeownership
- Detroit
- Cleveland
- Kansas City
- Milwaukee
- Wichita
Detroit, Michigan is the city with the lowest barrier to homeownership in 2024.
With a median list price of $85,000, it will take the average family in Detroit 2.25 years to save up for the down payment if they save 20% of their household income each year, according to Realtyhop.
Detroit, Michigan ranked as the city with the lowest barrier to homeownership in the U.S., according to RealtyHop.
Photo By Mike Kline (Notkalvin) | Moment | Getty Images
Detroit is best known as the center of the automotive industry in the U.S. Two of the biggest auto manufacturers, General Motors and the Ford Motor Company, are still based in and around the city.
The Michigan city is also home to the Detroit Metropolitan Airport, one of the busiest airports in the country and highest rated according to passenger satisfaction, according to J.D. Power. According to the FAA, the Detroit airport is the busiest in the state.
It is also a central hub for Delta Air Lines, which was the highest-rated domestic airline in the U.S., according to Bounce’s 2023 Airline Index.
Want to land your dream job in 2024? Take CNBC’s new online course How to Ace Your Job Interview to learn what hiring managers are really looking for, body language techniques, what to say and not to say, and the best way to talk about pay. Get started today and save 50% with discount code EARLYBIRD.