The Surprising Metros With the Highest—and Lowest—Homeownership Rates
The Surprising Metros With the Highest—and Lowest—Homeownership Rates
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With the economy humming along and wages on the rise, it seems like homeownership is all the rage these days as buyers go to great lengths to find the homes of their dreams and then outbid the competition for them.
Nationally, the homeownership rate ticked up to 63.9% in 2017, according to recently released U.S. Census Bureau data. This was the first time it’s risen annually since 2004, when it hit a high of 69%. (The data go back to 1960.)
But buying a home is a lot easier in some parts of the country, where housing is more affordable and salaries stretch further, than in others. So which metro has the highest homeownership rate in 2017?
It’s no other than Allentown, PA. The Rust Belt metro had a 73.1% homeownership rate. (The Census looked only at the 75 largest metropolitan areas.)
The median home list price in the metro area, which has suffered through area factory closures over the past few decades, is just $217,050. That’s well below the national median of $274,900 as of Feb. 1, according to realtor.com® data.
But Allentown, about an hour outside of Philadelphia and two hours away from New York City, is reinventing itself as a distribution center. Big companies such as Amazon, Walmart, and Nestlé have local operations, and FedEx is in the process of building another distribution facility. The local health care industry has been in expansion mode over the past few years.
About 40% of real estate agent Faith Brenneisen‘s clients are out-of-towners moving into the area for jobs or lower cost of living than in nearby cities. That’s led to the market heating up, starting around 2016. (That’s also when we identified Allentown as one of the nation’s top cities for first-time home buyers.)
“It’s a very, very hot market,” says Brenneisen of Keller Williams Real Estate in Allentown. She listed a four-bedroom house for $365,000 over the weekend, and by Tuesday she had received eight offers. “Any home that’s move-in ready will have competing offers,” she adds.
The other metros with high homeownership rates similarly had more affordable housing prices than bigger cities on the coasts.
Nationally, the homeownership rate of 63.9% is likely kept down because more folks prefer to rent than buy, says Stuart Gabriel, director of the Ziman Center for Real Estate at the University of California, Los Angeles. High prices in many parts of the country are also preventing many would-be buyers from entering the market.
“While this is a significant and welcome recovery in homeownership, we do not expect the homeownership rate to rise anywhere close to precrisis levels,” Gabriel says.
Meanwhile, the metros with the lowest homeownership rates were concentrated along the coasts, where high housing costs are often prohibitive for buyers.
“Many of these areas are characterized by development constraints, high house prices, and ongoing severe affordability problems,” Gabriel says.
The median home list price in Fresno, CA, was a fairly reasonable $300,000, but it was much higher in Los Angeles, at $724,022, and New York City, at $492,050.
In Fresno, a primarily agricultural community, many locals simply can’t afford to buy homes, says Fresno-based real estate broker Eleazar Gonzalez of Creative Real Estate. The farming community is halfway between San Francisco and Los Angeles, about a three-hour drive to either city.
“We’re comprised of a lot of migrant workers,” Gonzalez says. “A lot of people are priced out of the market.”
Metros with the highest homeownership rates
- Allentown, PA at 73.1%
- Pittsburgh, PA at 72.7%
- Louisville, KY at 71.7%
- Grand Rapids, MI at 71.7%
- Columbia, SC at 70.7%
- Birmingham, AL at 70.6%
- Detroit, MI at 70.2%
- Minneapolis, MN at 70.1%
- Nashville, TN at 69.4%
- Raleigh, NC at 68.2%
Metros with the lowest homeownership rates
- Fresno, CA at 48.5%
- Los Angeles, CA at 49.1%
- New York, NY at 49.9%
- San Jose, CA at 50.4%
- Urban Honolulu, HI at 53.8%
- Las Vegas, NV at 54.4%
- Austin, TX at 55.6%
- San Francisco, CA at 55.7%
- San Diego, CA at 56%
- Columbus, OH at 57.9%
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Source: Real Estate News and Advice – realtor.com » Real Estate News