These 16 cities offer the cheapest first year of homeownership in the US when considering down payments, taxes, and closing costs, according to Point2
- It’s still incredibly costly to buy a home in the US.
- But according to Point2, 16 cities including Detroit offer first-year homeownership costs under $80K.
- First-year costs include down payments, mortgage payments, taxes, insurance, and closing costs.
Homes remain extremely unaffordable for buyers on a national scale.
Homes are nearing some of their most unaffordable levels since the 1980s, according to the National Association of Realtors’ Housing Affordability Index, which takes into account home prices, mortgage rates, and income levels.
That’s bad news for would-be homebuyers. However, some areas are more affordable than others, and more affordable markets may be good entry points for new buyers, according to Point2, an online real-estate marketplace.
The firm identified the 16 cities with the cheapest first year of homeownership in a recent analysis of the 100 largest US markets, taking into account the average cost of a 20% down payment, closing costs, property taxes, monthly mortgage payments, and homeowners’ insurance. The first year’s cost of homeownership was less than $80,000 in all 16 cities. These prices exclude repair and maintenance costs, which can quickly add up depending on what is required.
“Climbing interest rates, high prices, and tight inventory create a cocktail doomed to cause some people to postpone homebuying — and others to reconsider the decision entirely,” Point2 said in a July 31 report. “Yet, despite the difficult financial journey of first-time buyers, there are some large cities where doing so may be the best option.”
In addition to highlighting opportunity areas, the firm issued the report to encourage prospective buyers to consider all costs associated with purchasing a home, not just the down payment.
We’ve listed the cities below in order of least to most expensive, and we’ve included Point2’s price breakdown for each item mentioned above.
1. Detroit, Michigan
Total cost of 1st year: $25,110
20% down payment: $15,000
Closing costs: $2,583
Annual mortgage: $4,684
Annual homeowners’ insurance: $1,223
Annual property taxes: $1,620
Source: Point2
2. Toledo, Ohio
Total cost of 1st year: $38,008
20% down payment: $24,000
Closing costs: $2,862
Annual mortgage: $7,495
Annual homeowners’ insurance: $1,215
Annual property taxes: $2,436
Source: Point2
3. Cleveland, Ohio
Total cost of 1st year: $38,569
20% down payment: $23,990
Closing costs: $2,862
Annual mortgage: $7,492
Annual homeowners’ insurance: $1,215
Annual property taxes: $3,011
Source: Point2
4. Fort Wayne, Indiana
Total cost of 1st year: $59,799
20% down payment: $40,590
Closing costs: $2,964
Annual mortgage: $12,676
Annual homeowners’ insurance: $1,500
Annual property taxes: $2,050
Source: Point2
5. St. Louis, Missouri
Total cost of 1st year: $61,635
20% down payment: $41,660
Closing costs: $2,890
Annual mortgage: $13,010
Annual homeowners’ insurance: $1,492
Annual property taxes: $2,583
Source: Point2
6. Milwaukee, Wisconsin
Total cost of 1st year: $63,001
20% down payment: $40,950
Closing costs: $3,237
Annual mortgage: $12,788
Annual homeowners’ insurance: $846
Annual property taxes: $5,180
Source: Point2
7. Memphis, Tennessee
Total cost of 1st year: $63,198
20% down payment: $41,440
Closing costs: $3,890
Annual mortgage: $12,941
Annual homeowners’ insurance: $2,088
Annual property taxes: $2,839
Source: Point2
8. Wichita, Kansas
Total cost of 1st year: $71,050
20% down payment: $47,000
Closing costs: $3,724
Annual mortgage: $14,677
Annual homeowners’ insurance: $2,265
Annual property taxes: $3,384
Source: Point2
9. Tulsa, Oklahoma
Total cost of 1st year: $71,386
20% down payment: $48,000
Closing costs: $3,238
Annual mortgage: $14,990
Annual homeowners’ insurance: $2,278
Annual property taxes: $2,880
Source: Point2
10. Buffalo, New York
Total cost of 1st year: $71,489
20% down payment: $44,500
Closing costs: $5,823
Annual mortgage: $13,897
Annual homeowners’ insurance: $1,418
Annual property taxes: $5,852
Source: Point2
11. Louisville, Kentucky
Total cost of 1st year: $73,014
20% down payment: $50,000
Closing costs: $3,204
Annual mortgage: $15,614
Annual homeowners’ insurance: $1,571
Annual property taxes: $2,625
Source: Point2
12. Indianapolis
Total cost of 1st year: $73,148
20% down payment: $49,980
Closing costs: $3,086
Annual mortgage: $15,614
Annual homeowners’ insurance: $1,571
Annual property taxes: $2,625
Source: Point2
13. Lubbock, Texas
Total cost of 1st year: $74,390
20% down payment: $48,000
Closing costs: $3,992
Annual mortgage: $14,990
Annual homeowners’ insurance: $2,536
Annual property taxes: $4,872
Source: Point2
14. Baltimore, Maryland
Total cost of 1st year: $74,702
20% down payment: $47,000
Closing costs: $7,557
Annual mortgage: $14,677
Annual homeowners’ insurance: $1,426
Annual property taxes: $4,042
Source: Point2
15. Oklahoma City, Oklahoma
Total cost of 1st year: $78,745
20% down payment: $53,299
Closing costs: $3,326
Annual mortgage: $16,644
Annual homeowners’ insurance: $2,278
Annual property taxes: $3,198
Source: Point2
16. El Paso, Texas
Total cost of 1st year: $79,534
20% down payment: $50,600
Closing costs: $4,069
Annual mortgage: $15,802
Annual homeowners’ insurance: $2,536
Annual property taxes: $6,527
Source: Point2
