How many of Boston’s renters could actually afford to buy?
For renters in Boston, buying a house may seem like an impossible feat.
For renters in Boston, buying a house may seem like an impossible feat. Student loans in conjunction with rising home prices in the area are barriers that prevent many millennials from taking the plunge to homeownership.
But a new report contains hope for some in Boston.
According to Zillow, 18.2 percent of Boston renters have the sufficient credit score and income to purchase a $394,400 home, the median price for the city. That’s actually a higher share than in most cities.
After looking at the country’s largest rental markets, Zillow found that 14 percent of on-market renters nationwide would actually be able to buy a home at the local median price. Boston came in as the No. 7 market with the highest share of renters qualified to buy.
San Jose, San Francisco, San Diego, Los Angeles, Seattle, and New York all had higher shares of renters qualified to buy than Boston did.
“When faced with hurdles of high prices and low inventory, first-time homebuyers are renting longer than ever before even if they are qualified to buy,” Zillow Chief Economist Dr. Svenja Gudell said in a statement. “San Jose, San Diego and Seattle are among the most competitive places for buyers, and the going isn’t any easier for renters – as they are competing against throngs of financially sound applicants with strong credit and high incomes.”
Zillow notes that there are barriers to homeownership other than income and credit scores, such as completing graduate school or starting a family.
Boston is also a bit of an outlier with a relatively high 61.1 percent homeownership rate. Markets with lower homeownership rates usually have higher proportions of on-market renters that are able to buy a home, Zillow added. But Boston’s homeownership rate is higher than in many of the cities with more renters qualified to buy.
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