Scottsdale among Top 15 cities with most expensive first year of homeownership

Sourced By: AZ Big Media 

For most Americans, the homebuying journey is daunting in and of itself — without even thinking about the expenses that follow once they check that milestone off their list. And, with the national down payment averaging $85,100, homeownership-related costs risk breaking the bank even before considering recurring mortgage payments, homeowners’ insurance, and property taxes. Still, the cost of that first year as an owner is a beast of its own that cannot be ignored — particularly in the big city. And Scottsdale is among the Top 15 cities in the U.S. with most expensive first year of homeownership.

• In the 100 largest U.S. cities, the cost of the first year of homeownership ranges between $25,100 and $389,900 — which is a staggering 15 times the lower amount.
• First-year expenses are less than $80,000 in 16 big cities, most of them in the Midwest. Detroit and Ohio’s Toledo and Cleveland top the list of markets with the cheapest homeownership costs.
• Homeownership costs go above $200,000 in 15 other markets, 11 of which are in California. Alongside San Francisco, the most excessive first-year expenses are in Fremont, San Jose, Irvine, and  Los Angeles.
• In 75 markets, it takes more than a decade of saving up to cover the full cost of the first year of homeownership. The average homebuyer is particularly priced out in LA, NYC, and Irvine, CA, where matching the amount would require more than 20 years.

Point2 wanted to see where new buyers would have a difficult time covering these expenses and where they could have a financially smoother first year of homeownership. We looked at the 100 largest U.S. markets to determine the costs associated with the first year of homeownership, focusing on two types of expenses: Upfront costs and annual recurring costs.

Upfront costs consist of a set 20% down payment, as well as closing costs such as origination charges, title insurance, inspection fees, and other service fees. Annual recurring costs include mortgage payments (assuming a 30-year fixed-rate mortgage with an average interest rate of 6.78%), homeowners’ insurance, and average property tax.

For a clearer glimpse into what first-time buyers are experiencing, we analyzed the number of years it would take for the average renter to save up for the upfront costs required to buy, as well as how many years it would take to cover the full cost of the first year of homeownership.

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