Austin Business Journal shares, "Hutto is the best market for first-time homebuyers in the Austin area, according to a new analysis by Realtor.com.
The analysis identified the best markets nationwide for first-time homebuyers, as well as the top local city or suburb in major metro areas. Realtor.com examined median home listing prices, available inventory, forecasted price growth, commute times and unemployment rates when compiling the data.
The report lists median home prices of about $387,000 for Hutto, which is about 30 miles northeast of downtown Austin in Williamson County. That compares to a metro-wide median price of about $500,000, according to Realtor.com. The Austin Board of Realtors tracks slightly lower numbers on those fronts. ABOR reports that the median price in the Austin area is closer to $450,000, and it pegs median home prices in Hutto at about $380,000.
Housing demand in that part of Central Texas is expected to skyrocket as a huge Samsung chipmaking factory comes online later this year a stone's throw away from Hutto's city limits. Several other large employers also are on the cusp of landing in Hutto, at what the city calls its "megasite."
Top markets nationally for first-time homebuyers
Realtor.com named Irondequoit, New York, just outside of Rochester, as the nation's best market for first-time buyers.
The community has a median listing price of $187,000, an average commute of 22 minutes, a 12-month inventory of 34 homes per 1,000 households and forecasted home sale price growth of 10%.
Benton, Arkansas, and Winterset, Iowa, ranked second and third, nationally
“By definition, these areas have high housing affordability for young households, greater availability relative to other areas, healthy local economies and growing housing markets,” said Danielle Hale, chief economist at Realtor.com.
Communities at the bottom of Realtor.com’s list are projected to see home prices drop by as much as 3% in 2024, as opposed to communities at the top of the list, where prices are forecasted to increase more than 10%.
Income needed to afford a starter home
The country’s current median home price is $382,000, while the average median home price on Realtor.com’s best markets for first-time homebuyers list is 42% lower at $223,720.
As interest rates rose last year, the income threshold needed to afford a home has also increased. But the National Association of Realtors expects rates to cool slightly to an average rate of 6.3% for 2024.
Not considering taxes and insurance, Realtor.com’s Hale estimates an income of at least $62,100 to $69,000 would be needed to purchase at the $223,720 median price. That’s assuming a mortgage rate of 6.66% and a 30-year fixed mortgage with varying down payments of 0% to 10%.
But Hale isn’t ruling out communities that track further down.
“Areas that rank lower tend to be in pricier metro areas. Furthermore, some are weighed down by lower housing market outlooks for 2024,” she said. “For first-time buyers who are in an area and don’t want to leave, however, the markets on this list still represent a good opportunity relative to other parts of major metro areas.”
Bigger metros may continue to feel an affordability squeeze
At least half the communities on Realtor.com’s top 10 list for first-time buyers are in the central part of the country, far from the coastal job-growth hot spots that traditionally attracted young workers.
While the pandemic and the remote-work wave dispersed some of that growth into less traditional areas, many companies are now dialing back on remote work.
A recent Realtor.com study found potential buyers in the least affordable markets with substantial workplace flexibility were most likely to look for a home outside where they currently lived. While in more affordable markets, this was less of a concern.
“I think the big takeaway for larger tech-oriented markets that have pricier housing is that affordability matters and if they want to hold on to the population gains they’ve enjoyed in recent years, they need to tackle housing affordability,” Hale said.
Also heartening for first-time homebuyers is Redfin data showing large, institutional investors aren’t gobbling up single-family homes at quite the same clip."
Source: Austin Business Journal
Written by: Joanne Drilling
Published: February 1, 2024
Posted by Grossman & Jones Group on
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