With the national median price of a single-family home nearing $400,000, according to the National Association of Realtors®, it could take a first-time homebuyer several years to save up enough for a down payment, closing costs, property taxes, and other related expenses. But rising single-family home prices shouldn’t deter first-time buyers from entering the housing market. The condo segment is much more affordable and is an excellent option for first-time homebuyers eager to start building home equity and have a place to call their own.
In most major US cities, median condo prices are below $300,000, offering buyers an opportunity to afford smaller down payments and get into the market sooner. So which of these markets give first-time buyers the best chance at homeownership?
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To find out which cities are the best for buying a condo, Zoocasa analyzed median condo price data in 34 markets across the US and calculated how many months it would take a homebuyer earning the median household income to save for a down payment. For the purpose of this report, it was assumed that the homebuyer was contributing 100% of their annual income to save for a down payment, based on saving 8% of the purchase price. The National Association of Realtors® Profile of Home Buyers and Sellers notes that the typical down payment for first-time buyers was 8% in 2023. Median condo prices were sourced using the most recently available data from NAR® and individual real estate boards. Median household income was sourced from the US Census Bureau.
Condo Buyers Can Save for a Down Payment in Under 5 Months in Most Cities
It would take a median-income earner around 4.5 months to save for the typical 8% down payment on a condo purchased at the national median price of $349,600, but in 21 cities, it takes even less time.
With typical down payments of $20,000 or under, it’s hard to beat condo affordability in San Antonio, Albany, and Louisville. In each of these cities, it would take a median-income earner 3.3 months or less to save for the typical 8% down payment. San Antonio also boasts the second-most affordable median condo price of the 34 cities we analyzed, at $167,000, coming in just behind Cleveland which has the lowest at $161,500.
Several other in-demand cities have typical down payments under $20,000 and require less than 5 months of saving, including Tallahassee, Houston, and Tucson. A first-time buyer would need to save for just 3.5 months to be able to afford the typical down payment of $15,600 in Tallahassee, while in Tucson it would take a first-time buyer 4.6 months to save for the typical down payment of $19,840.
Higher Incomes Don’t Always Lead to Easier Paths to Homeownership
Though San Francisco has the highest median household income of the cities we analyzed, it would still take a first-time buyer 5.6 months to save for the typical down payment of $64,000. Similarly in Boston and Los Angeles, the median household income is above $80,000 while the median condo price is $740,000 and $650,000 respectively. That translates to 7.9 months of saving for the typical down payment of $59,200 in Boston and 7.5 months of saving for the typical down payment of $52,000 in Los Angeles.
Washington DC buyers on the other hand have the second-highest median household income, but because condo prices are much more affordable, buyers only need to save for 3.3 months to afford the typical down payment of $28,192.
However, even homebuyers with more modest incomes can still find advantages in markets with lower condo prices. Take St. Louis for example, where despite having a lower median household income of $52,941, homebuyers can afford the typical down payment of $17,200 in just 3.9 months.
If you’re a first-time buyer looking to get into the real estate market this year, we can help! Give us a call today to speak with a qualified agent in your area.
