This article was first published on NerdWallet.com.
Home prices may have come down from their 2022 high, but they remained out of reach for the typical would-be first-time buyer in the second quarter, especially in the nation’s most populous areas.
Buying a home in this market can be particularly hard for people who haven’t done it before. First-time buyers traditionally have lower incomes and less established credit than repeat home buyers. Further, they generally make smaller down payments — 8%, on average, according to the most recent Profile of Buyers & Sellers from the National Association of Realtors, compared with 19% for repeat buyers. Buying a first home has arguably never been easy, but it’s gotten extremely difficult under current conditions.
With a down payment of 8%, housing payments on a typically priced home in the second quarter of 2024 would equate to almost half of the median gross monthly income for Americans of first-time buyer age.
Making a larger down payment or choosing a less desirable home could make this initial purchase easier, but not all homebuying hopefuls will find those options possible.
The average sticker price for a home in the second quarter of this year was $439,000, according to NerdWallet analysis of Realtor.com data. But the advertised price of a home is far from the only consideration of affordability.
For that reason, we examined the potential housing payment for first-time buyers in the second quarter. This payment not only accounts for the price of the home, but also the typical first-time buyer down payment, mortgage rate, real estate taxes, homeowners insurance and...
