Home affordability continues its decline across the nation and across income levels. But it’s potential first-time homebuyers that feel the hardest pinch, according to a new analysis by First American.

The data shows that nationally, affordability for potential first-time homebuyers (current renters) declined 19% year-over-year in June 2022. But the range of affordability varies greatly depending on where a potential first-time homebuyer lives.

Buffalo, NY is still vastly more affordable than other areas of the country, according to the data. Pittsburgh, Oklahoma, Cincinnati, and Milwaukee are also in the top five.

First American Economist Ksenia Potapov said cities generally fall into one of three categories:

  • affordable for all potential first-time home buyers
  • affordable for some
  • unaffordable for all

In Buffalo, potential first-timers can find more than their “share” of homes within their house-buying power. That goes across nearly the entire income distribution.

“The impact of the combined affordability headwinds of rising mortgage rates and rapid house price appreciation is evident. None of the markets on the list offer renters in the 30th percentile an equal or greater share of homes to buy,” said Potapov. “A year ago, in the third quarter of 2021, nine markets met that threshold. However, in the most affordable market, Buffalo, a renter in the 30th percentile, with a household income of $29,800 and a house-buying power of $148,400, could still afford 25 percent of homes for sale.”

That doesn’t hold true in Phoenix, New York, and Austin, Texas. In those areas, renter households across the income distribution are unable to afford an equal share of homes to buy.

In Pittsburgh, San Antonio, and Cincinnati, only some households can find an equal share of homes to buy. Those are usually at the upper range of the income distribution, the analysis found.

In San Antonio, the split is fairly clear. Renters who make less than $79,000 have trouble affording a home. Renters who make more than $79,000 can afford more than their share.

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