WalletHub, a personal finance website, ranked the most favorable cities nationwide for new owners. Eleven cities in Palm Beach and Broward counties made the list of 300, with Sunrise ranking the highest at 95.
Miami Beach (No. 299) and Miami (294) were among the lowest-ranked cities, according to WalletHub.
The website said the analysis is based on 19 factors, including housing affordability, real estate taxes and crime rates. While some cities across the country were excluded from the study because of insufficient data, the report does underscore the problems first-time buyers face in the tri-county region.
Affordability is becoming a bigger issue as home prices rise. Median prices for existing, single-family homes in all three South Florida counties topped $300,000 in June, according to local Realtor boards. The median means half the homes sold for more and half for less.
What’s more, rising land costs in South Florida have most builders planning high-end homes and condominiums that are well out of reach for first-time buyers, analysts say.
“If you look at the housing stock, there are just not a lot of homes on the low end,” said Jim Sahnger, a mortgage loan originator for Schaffer Mortgage Corp. in Palm Beach Gardens.
“Affordability is the No. 1 issue that makes first-time buyers antsy about owning a home in South Florida,” added Ken Johnson, a real estate professor at Florida Atlantic University.
Johnson said higher prices limit financing options. The tri-county area has a larger mix of home styles than smaller communities, complicating the home buying process, he said.
“It’s just way more daunting here,” Johnson said. “There’s less uncertainty, and it’s more straightforward, in places like Middle America.”
Not only are home prices steadily increasing throughout South Florida, but so, too, are rents. And flat wage growth is a major obstacle for consumers trying to save enough money for a downpayment on a home, said Kevin Maher, a consumer credit consultant and president of the Palm Beach County Affordable Housing Collaborative.
“It’s a never-ending spiral right now,” Maher said. “Some people are taking on roommates because that’s what you have to do to make ends meet.”
The challenges facing first-time buyers have many mistakenly thinking they have to put 20 percent down to qualify for a mortgage, Sahnger said. With a Federal Housing Administration loan, a downpayment can be as low as 3.5 percent. Other programs may require even less down – and they may be willing to work with borrowers with spotty credit histories, Sahnger said.
“While we haven’t returned to the days of complete flexibility of the mid-2000s, you can still get a loan,” he said.
Aside from Sunrise, the other cities from Palm Beach and Broward counties on the WalletHub list were: Pembroke Pines (No. 96); Boca Raton (114); Miramar (163); Plantation (172); Coral Springs (179); Hollywood (188); Pompano Beach (190); Davie (211); West Palm Beach (219) and Fort Lauderdale (253).
Elsewhere in the United States, Overland Park, Kansas, was the top city, while Greeley, Colo., was second. Newark, N.J., came in last.
South Florida generally fared poorly when the rankings were adjusted by population.
Sunrise (No. 48) was the highest-ranked South Florida city among communities with fewer than 150,000 residents, while Pembroke Pines (26) was the highest-ranked South Florida city in the midsize category (150,000 to 300,000 residents).
The only South Florida city included among large communities (more than 300,000 residents) was Miami, which ranked 61 out of 62.
See the complete lists at wallethub.com.
Copyright © 2016 the Sun Sentinel (Fort Lauderdale, Fla.), Paul Owers. Distributed by Tribune Content Agency, LLC.