Nashville renters can't afford starter homes

Nashville renters earned 52% of the income they would need to afford a starter home in October 2022, according to an analysis by real estate website Point2Homes.

• Researchers considered "starter homes" to be properties valued in the lower one-third of all available homes for sale.

Why it matters: Higher mortgage rates and housing costs are keeping homeownership out of reach from many first-time buyers.

By the numbers: Renters in Nashville earned a household income of $45,469 on average, while the income needed to cover a mortgage was $86,831, according to the study.

• In September 2022, a typical Nashville starter home cost $344,349, the study found, analyzing Zillow data.

Zoom out: Following October's interest rate hike, renter households in 15 of the 50 largest U.S. cities made less than half the income needed to buy one of the cheapest homes in town, per the analysis.

The big picture: Across the U.S., the share of first-time home buyers 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% in 2021, the group found.

What we're watching: Nashville home values would have to fall 39% to return to historical affordability norms, per a recent Zillow report.

Go deeper: three reasons it's getting harder for renters to buy.