First-year homeownership costs have dramatically increased across U.S. cities, according to a new report from SmartAsset released this week.
The report examined how much the first year of homeownership costs in the 20 largest U.S. cities. It compared 2022 data across several metrics related to homeownership, including property taxes, home insurance, closing costs and more.
According to the report, first-year homeownership costs have increased between last year and this year across all cities, with the average swelling by about 17%, from $364,900 to $426,997.
Key highlights:
- Four out of five of the least affordable cities are in California, with the Southern cities coming out to be more expensive than Northern ones.
- The average monthly mortgage payment exceeds $1,000 in all 20 cities, which is an increase from the less than $1,000 of last year.
- First-year homeownership costs are least affordable in San Francisco, California; San Jose, California; Los Angeles, California; San Diego, California and Seattle, Washington at $426,997, $391,935, $263,999, $263,089 and $261,495 as total costs, respectively.
- The cities with the most affordable first-year homeownership costs are Jacksonville, Florida; Houston, Texas; Philadelphia, Pennsylvania; Columbus, Ohio; and Indianapolis, Indiana at $85,631, $79,107, $71,590, $70,192 and $63,244, respectively
Major takeaway:
“Mortgage rates have jumped over three percentage points this year, recently hitting new highs above 6.0%. And for new homebuyers, this has dramatically increased the cost of buying a home.,” said Stephanie Horan, a data journalist for SmartAsset and author of the report. “Though homebuyers may refinance over the course of their mortgage (thus securing a lower rate), most experts say interest rates are unlikely to drop in 2023. Homebuyers in large cities are in an especially tough spot given relatively high home values.”
For the full report, click here.
