When many people dream of home ownership — especially after years of paying rent — they don’t just want any house in any neighborhood. They want a choice of locations to find the perfect home. A new study reveals that no metropolitan area in the country offers more choices to first-time buyers than Oklahoma City.
A report by First American Financial Corporation looked at the 50 largest metropolitan areas in the country and determined that small cities present the best conditions for renters to become buyers. Topping the list of small metro areas was Oklahoma City, where an ideal combination of prices and insurance has created a market where an average median-earning family can afford to leave monthly rent payments behind and put down roots.
That’s good news for Millennials (those born between 1982 and 1996), who make up a large portion of new homebuyers and represent a growing portion of the Oklahoma City area: OKC was recently named a top 10 “Millennial Boomtown,” a testament to the area’s resources and strong job market. And even though some may carry student loan debt, young people and families are finding that Oklahoma City is a remarkably affordable and attractive area to make the leap from renting to buying.
To understand why Oklahoma City took the number one slot in the First American survey, you have to crunch some numbers. The ability of a first-time buyer to make a purchase is based on a combination of their buying power, household income, and the current mortgage rates. The study authors further assumed that buyers would make a small down payment of five percent and would use up no more than a third of their monthly earnings on house payments and debt. After the third quarter of 2019, when mortgage rates dipped to their lowest point since 2016, home-buying power nationwide shot up 14 percent. And, as evidenced by the fact that more than half of all mortgage loans from Fannie Mae and Freddie Mac are now being taken out by first-time buyers, people are taking advantage of the opportunity presented to them. That’s good news for the housing market and even better news for buyers, who find themselves with more options than ever.
And when it comes to having choices, Oklahoma City has them in spades. According to First American’s First-Time Homebuyer Outlook Report, the median renter in Oklahoma City has a household income of $37,070 and a house-buying power of $230,099 — which covers 74 percent of the homes in the Oklahoma City metro area. With nearly three-quarters of homes in play, first-time buyers have their choice of neighborhood. In addition, Oklahoma City requires one of the lowest down payments and down payment percentages in the country.
Of course, making the leap from renting to buying can be a nerve-wracking decision — and it might not be the best one, especially if you’re not planning on staying in a location for more than a year. However, the pros of buying — especially in Oklahoma City — often outweigh the cons. In addition to the equity that comes with home ownership and various tax deductions, owning a home gives you creative ownership over a space. And, on a nuts-and-bolts level, instead of paying the landlord every month, you are investing in your own home.
Ultimately, if there’s one place in the country where it makes sense to ditch rent and find a place of your own, Oklahoma City is it. Contact TimberCraft today to start the journey to becoming your own landlord.