U.S. cities where first year of homeownership is most expensive

There are many factors that lead to rising housing costs in the US, including rising interest rates and even remote work. And the first year of home ownership in particular can be especially costly between down payment, closing costs, mortgage payments, property insurance, and property taxes.

New SmartAsset data reveals how expensive the first year of home ownership is often in major US cities. Unsurprisingly, those looking to own a home in a big city start out at a disadvantage due to high home values in these areas.

SmartAsset looked at data from the 20 largest cities in the US and specifically looked at two categories: upfront costs and annual recurring costs.

For down costs, SmartAsset assumed a 20% down payment on a median priced home, using Zillow data, as well as average closing costs, excluding escrow and any prepaid expenses. Annual recurring costs include mortgage payments, average property taxes, and property insurance. The data also assumes a 30-year fixed-rate mortgage with an interest rate of 6%.

These are the 10 cities where the first year of owning a home is more expensive:

1. San Francisco

Deposit: $316,439

Annual mortgage cost: $91,066

Total cost of the first year: $426,997

2. San Jose, California

Deposit: $288,955

Annual mortgage cost: $83,157

Total cost of the first year: $391,935

3. Los Angeles

Deposit: $193,199

Annual mortgage cost: $83,157

Total cost of the first year: $263,999

4. San Diego

Deposit: $192,376

Annual mortgage cost: $55,600

Total cost of the first year: $263,999

5.Seattle

Deposit: $190,589

Annual mortgage cost: $54,848

Total cost of the first year: $261,495

6. New York

Deposit: $152,304

Annual mortgage cost: $43,831

Total cost of the first year: $231,918

7.Boston

Deposit: $146,771

Annual mortgage cost: $42,238

Total cost of the first year: $201,833

8. Austin, Texas

Deposit: $132,476

Annual mortgage cost: $38,125

Total cost of the first year: $191,611

9.Denver

Deposit: $125,318

Annual mortgage cost: $36,064

Total cost of the first year: $173,137

10. Phoenix

Deposit: $84,095

Annual mortgage cost: $24,201

Total cost of the first year: $116,403

If you’re interested in owning a home in one of these expensive places, the first thing to do is “[question] whether or not it makes sense to move to an expensive city if your income can’t support it,” says Douglas Boneparth, a certified financial planner and president and founder of Bone Fide Wealth.

Also, ask yourself if what the city offers is enough to “justify the inherently higher costs” of living there, he tells CNBC Make It.

It’s important to know where you stand financially, especially in terms of what you earn and what you spend, says Boneparth.

“If you’re moving to a place that’s inherently more expensive, and that’s where you need to be or want to be or a combination, there’s never a bad time to understand where your money is going and what you’re spending it on.” ,” he says.

If you want to be able to spend more money on housing, you can start by reducing your everyday expenses, like spending less on food and taking fewer vacations.

But keep in mind that “if you cut back too much, you’ll start to feel more and more uncomfortable,” says Boneparth. “At some point you have to be able to say, ‘Am I so uncomfortable that living here isn’t even worth it?'”

Do you want to earn more and work less? Record free CNBC Make It: Your Money Virtual Event on December 13 at 12 p.m.

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