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The 10 U.S. Cities Where the First Year of Homeownership Is the Cheapest

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Owning a home in San Francisco costs nearly $500,000 for just the first year. But in many other U.S. cities, the first year of homeownership is more affordable.

Recent data from SmartAsset shows the average cost of the first year of owning a home in several major cities. The study anaylized data for the 20 largest cities in the U.S., specifically considering two categories: upfront costs and annual recurring costs. 

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

Keep in mind that living in any of these areas will be more expensive than smaller places, due to competition and high home values. But within the list of major cities, here are the 10 places where the first year of homeownership is the least expensive.

1. Indianapolis

Down payment: $44,102

Annual mortgage cost: $12,692

First year total cost: $63,244

2. Columbus, Ohio

Down payment: $47,261

Annual mortgage cost: $13,601

First year total cost: $70,192

3. Philadelphia

Down payment: $46,612

Annual mortgage cost: $13,414

First year total cost: $71,590

4. Houston

Down payment: $52,307

Annual mortgage cost: $15,053

First year total cost: $79,107

5. Jacksonville

Down payment: $58,876

Annual mortgage cost: $16,943

First year total cost: $85,631

6. San Antonio

Down payment: $58,059

Annual mortgage cost: $16,708

First year total cost: $87,388

7. Fort Worth, Texas

Down payment: $63,465

Annual mortgage cost: $18,264

First year total cost: $94,949

8. Dallas

Down payment: $64,101

Annual mortgage cost: $18,447

First year total cost: $95,528

9. Chicago

Down payment: $63,098

Annual mortgage cost: $18,159

First year total cost: $96,611

10. Charlotte, North Carolina

Down payment: $76,771

Annual mortgage cost: $22,093

First year total cost: $107,524

While Indianapolis is the least expensive city on the list, first-year expenses still grew from $50,014 in 2021 to $63,244 in 2022 — a 26% increase. The current median home price in Indianapolis is $220,511. 

Despite these being the 10 cities where the first year of homeownership costs the least, mortgage costs are still higher than they have been in the past.

For many homeowners, “housing expenses are just becoming a larger part of your income,” says Douglas Boneparth, certified financial planner and president and founder of Bone Fide Wealth.

If you’re thinking about buying a home, be sure to understand your own income first to see how housing expenses would impact your budget.

“You should know exactly what you’re making. You should have a good idea of what you’re spending,” says Boneparth. “You should know what you can consistently afford to save and invest.”

Want to earn more and work less? Register for the free CNBC Make It: Your Money virtual event on Dec. 13 at 12 p.m. ET to learn from money masters how you can increase your earning power.

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