15 Cities Where Starter Homes Are Most Out of Reach for Renters

If you’re a renter who feels buying a first home is way out of reach, it might be, depending on where you live.

Point2 conducted a study to determine the affordability of starter homes in the 50 largest U.S. cities. The study analyzed Zillow data to calculate the median value of a starter home in each city and U.S. Census Bureau data to get the median household income of each area’s renters. It also determined how much annual household income a renter would need to purchase a starter home in each city at current mortgage rates, allocating 30% of income to mortgage payments.

The study revealed that starter homes are most out of reach in the 15 U.S. cities listed below, where many renters would need to more than double their annual household income to move from renting to homeownership.

A starter home is a small house that enables a first-time buyer to afford homeownership. Many homeowners only keep a starter home for three to seven years, typically long enough to build some equity they can use to buy a bigger home. According to Zillow, a starter home is typically 750 to 1,250 square feet with only one bathroom and one or two bedrooms.

The Point2 study defined a starter home as one “valued in the bottom one-third of all available homes for sale” in a given area.

If you rent in one of the following U.S. cities, you would need an additional $33,977 to $150,475 in annual household income (on top of the average renter’s income) to buy a starter home.

• Renter household income: $100,715
• Income required: $251,190

The average San Francisco renter needs an additional $150,475, or almost a 150% increase, in annual household income to purchase a starter home.

• Renter household income: $84,730
• Income required: $226,720

The median household income for a renter in San Jose is only 37% — or short $141,990 — of the income needed to buy a starter home in the area.

• Renter household income: $49,568
• Income required: $166,937

The median household income of a Los Angeles renter is $117,369 less than the income needed to get into a starter home. If you’re an average L.A. renter, you’ll need to more than triple your income to afford a house in the area.

• Renter household income: $52,724
• Income required: $156,343

The income needed for a New York City starter home is $103,619 more than the median household income of a New York renter. Like in Los Angeles, average New York renters only earn about a third of the necessary income for homeownership.

• Renter household income: $57,431
• Income required: $154,213

The average household income of an Oakland renter is only 37% of that needed to buy a home, a difference of $96,782.

• Renter household income: $63,390
• Income required: $159,799

In San Diego, the income required for homeownership is 60% more than the median renter household income, an annual income shortage of $96,409.

• Renter household income: $70,164
• Income required: $162,361

The average Seattle renter lacks $92,197 in annual income to buy a starter home. So, if you’re an average Seattle renter, you need to more than double your income to afford a starter home.

• Renter household income: $50,566
• Income required: $138,658

The annual household income needed for a Long Beach starter home is $88,092 more than the median household income of a Long Beach renter, which means average renters only earn about 36% of the income needed for comfortable homeownership.

• Renter household income: $53,188
• Income required: $127,632

The annual income required to buy a starter home in Boston is more than twice the median renter household income. Boston renters on average need an additional $74,444 each year to own rather than rent.

• Renter household income: $55,640
• Income required: $129,268

In Austin, there is a 57% difference between the income required to purchase a home and the median renter household income. This means renters’ household income on average is $73,628 less than the amount needed to buy a house.

• Renter household income: $49,643
• Income required: $111,505

The average Portland renter only earns 45% of the annual income needed to purchase a starter home. Renters in this Oregon city need on average an additional $61,862 for homeownership.  

• Renter household income: $36,532
• Income required: $92,227

The median household income of Miami renters is $55,695 short of the annual amount needed to afford a starter home. The average renter wanting to buy a house in Florida’s southern tip needs more than two and a half times the income.

• Renter household income: $47,524
• Income required: $99,547

The average Sacramento renter needs an additional $52,023 in income to move from renting to homeownership. Renters’ annual household income on average is only 48% of what’s required to buy a starter home.

• Renter household income: $34,357
• Income required: $72,117

The median Fresno household income for renters is slightly less than half — or $37,760 below — the income required for a starter home.

• Renter household income: $31,885
• Income required: $65,862

In Tucson, the median renter household income is only $33,977 below the income needed to purchase a starter home. However, this difference means many Tucson renters must double their income to buy.