Readers: Are you concerned about costly homeownership in Boston?
Boston is now one of the 10 most expensive cities for first-year homeownership.
Buying a home is becoming increasingly unattainable for many people in Boston, and according to a new report, a big factor is due to costs during the first year of homeownership.
In addition to rising mortgage rates nationwide, new homeowners also have to deal with first-year expenses like down payments and closing costs. That combined with recurring costs for insurance and property taxes makes Boston one of the 10 most expensive cities for first-year homeownership, according to SmartAsset, a financial advising platform.
SmartAsset compared the down payment on the median-valued home, average closing costs, monthly mortgage payment, property taxes, and homeowners insurance, in the 20 largest cities in the country and found that Boston was the seventh most expensive city. In 2021, Boston was ranked fourteen on this list.
The total first-year costs for the average first-year homebuyer in the city is $201,833, compared to $231,918 in nearby New York City, which ranked sixth, and $426,997 in San Francisco, which ranked first. The total cost in Phoenix, Ariz., the tenth most expensive city, was $116,403. The average monthly mortgage payment is also up to more than $1,000 in every city SmartAsset looked into.
If you want cities with cheaper costs, look primarily to the Midwest and South. The cities where first-year homeownership costs are most affordable include Indianapolis, Ind., Columbus, Ohio, Philadelphia, Pa., Houston, Texas, and Jacksonville, Fla.
No matter where you live in the country, however, you have to contend with increased costs. In Indianapolis, the average first-year homeownership cost rose by about 26%, from $50,014 to $63,244 in the last year. Here in Boston, that first year is nearly 15% more expensive this year compared to last, according to an analysis of SmartAsset data.
City leadership is aware of the housing crisis the city currently faces. As part of Boston Mayor Michelle Wu’s operating budget proposal, this summer the city proposed a $106 million investment to expand affordable homeownership.
“I want to note that $106 million for homeownership is not enough. It’s still just a drop in the bucket. But we are trying to change that bucket and rebuild the entire system,” Wu said at a press conference in August. “Along with that, this $106 million for homeownership is part of our larger allocation towards housing stability as the foundation for our recovery.”
Have you recently bought a home in Boston or do you plan to in the near future? Are you paying more than you’d like for the first year of home ownership or will you delay your plans until costs go down? Tell us how you feel about the rising costs of home ownership in the city by filling out the survey below or e-mailing us at [email protected] and we may feature your response in a future article or Boston.com social media content.
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