How much do I have to make to afford a starter home in Boston and beyond? THE HARD DATA
Looking for a starter home in Greater Boston? Brace for a challenge. The Greater Boston Association of Realtors reports record-high median sales prices for single-family homes and condos in September, hitting $849,950 and $680,500. Despite being more affordable, starter homes pose a greater hurdle. Realtor.com data suggests an annual income of $209,680 is needed for a typical two-bedroom starter home, surpassing the 2022 median household income of $104,299.
Buyers struggle with down payment size and high interest rates, reducing purchasing power, notes Alison Socha, Greater Boston Association of Realtors president. Many are turning to neighboring states for affordability; for instance, a two-bedroom starter in the Portland, Maine, metro area requires an income of $150,840. Those preferring the small-town feel of Providence can afford a starter home with an income of $120,360.
Ellen Mulligan, a Coldwell Banker Realty agent, observes an influx of Boston buyers to New Hampshire due to more affordable options. To stay in Massachusetts, experts suggest strategies such as exploring small towns or rural areas. Melvin A. Vieira Jr., a RE/Max Destiny agent, notes buyers moving west to places like Springfield or Worcester, where incomes needed are $82,960 and $119,760, respectively.
The National Association of Realtors lobbies Congress to increase capital gains exclusions for principal residence sales, potentially stimulating the market. First-time buyers can consider fixer-uppers, with financing available through the FHA 203(k) program, covering acquisition and renovation costs with a 3.5% minimum down payment. MassHousing offers up to $50,000 in down payment assistance for eligible buyers.