Starter homes are more affordable in Detroit than most other cities
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Detroit is one of only four large U.S. cities where renters could recently afford a starter home.
- An analysis by the real estate website Point2Homes considered "starter homes" properties valued in the lower one-third of all available homes for sale.
Why it matters: The city offers relatively affordable home buying opportunities at a time when higher housing costs nationally present obstacles for first-time buyers.
- In September, a typical Detroit starter home cost $48,129.
Reality check: Some homes for sale under $50,000 are foreclosures. Others need a lot of work to be liveable.
By the numbers: In October, Detroit renters made 31% more than the income they would need to buy a starter home, according to the analysis.
- Renters in the Motor City earned a household income of $25,004 on average, while the yearly income needed to cover a mortgage was $19,103.
Between the lines: Despite the relative affordability of Detroit homes, 45% of local mortgage applications were incomplete, withdrawn or denied in 2020, according to Detroit Future City.
- The lending industry's reliance on credit scoring inequitably hampers Black applicants.
- Poor credit makes it more difficult to obtain a mortgage.
- Detroit Future City recently published a report offering step-by-step advice to ensure mortgage lenders aren't unfairly using your credit history against you.
The big picture: The share of first-time home buyers across the United States has shrunk to a record low, according to the National Association of Realtors.
- First-time buyers made up 26% of all buyers in 2022, down from 34% last year, the group found.