The Journal Gazette
Wednesday, October 06, 2021 1:00 am

Study: City 2nd fastest to gain home ownership

SHERRY SLATER | The Journal Gazette

Fort Wayne ranks second nationwide in a study that calculates how quickly renters can become homeowners in the 100 largest U.S. cities.

Results of the second annual study were released Tuesday by SmartAsset, an online resource for consumers looking for a financial adviser.

Local renters can afford to make a 20% down payment and cover closing costs within an estimated 2.15 years, the study says. Laredo, Texas, was No. 1 with estimated home ownership in 2.10 years, according to the data.

Toledo, Detroit and Wichita, Kansas round out the top five.

Adam Smith, a local real estate agent with Coldwell Banker, said Fort Wayne always has been a very affordable market for homebuyers.

Last year, when many companies allowed employees to work remotely, some West Coast residents moved here, lured by the lower cost of living, he said. As a result, they are able to “live like kings” on salaries pegged to Seattle and San Francisco costs, according to Smith, who is also board president of the Upstate Alliance of Realtors Multiple Listing Service.

To calculate the time spans for home ownership, SmartAsset researchers started with each city's median household income and subtracted amounts based on the effective income tax rate and median annual rent rate.

They assumed renters would be able to save 40% of their post-tax and rent income annually. How realistic that figure is varies by individual household, but it was used consistently in determining each city's ranking.

The study then divided the upfront costs of buying a home – 20% down payment and closing costs – by the projected savings to reach the final estimate for how long it would take renters to buy a home.

The median household income in Fort Wayne is almost $49,900, and the median home value is $124,400 – data that came from the U.S. Census Bureau.

Six of the top 10 cities are in the Midwest. Three of the top 20 cities are in Ohio – Toledo, Cleveland and Columbus.

A SmartAsset news release said, “Though the COVID-19 pandemic has financially impacted Americans in many ways, the homeownership rate has risen and stayed elevated, census Bureau data shows that the homeownership rate actually hit 67.9% in the second quarter of 2020, up from 64.1% from a year before.

“More recently, the national homeownership rate was 65.4% in the second quarter of 2021, which is slightly higher than pre-COVID-19 rates.”

Using the same methodology, it would take an estimated 11.5 years for New York City residents to afford to buy a home, the longest time period in the study.

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