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10 metros where a home costs about $1,000/month

 

Cleveland

Affordability generally improved in the third quarter of 2016, as only mild home price increases were generally offset by lower mortgage rates. In the 10 markets presented here, seven saw small declines in monthly payments; the average decline was about $13 per month. In the three metros that saw monthly payment increases, the damage was slight, with an average rise  of about $7 per month.

Based off our 27-metro list, HSH.com identifies 10 metro areas where you can afford the base cost of owning a median-priced home – the principal, interest, taxes and insurance payments -- for only around $1,000 per month. In the commentary of each slide, we discuss how the monthly figures will change when a home buyer makes a 10 percent down payment instead of a 20 percent down payment. HINT: The monthly payments will increase substantially with 10 percent down (and increase even more if you put 5 percent down).

Mortgage rate: 3.49 percent

  • Quarterly change: -0.13 percent

Home price: $140,000

  • Quarterly change: -0.36 percent
  • YOY change: 0.00 percent

Monthly payment: $745.79

Salary: $31,962.36

  • Quarterly change: -$427.73

Modest declines in the rates and prices caused the required salary figure to fall by $428 during the third quarter. If home buyers in the Pittsburgh metro put 10 percent down instead of 20 percent, the required salary increases from $31,962.36 to $36,633.28.

Mortgage rate: 3.58 percent

  • Quarterly change: -0.14 percent

Home price: $138,900

  • Quarterly change: +0.58 percent
  • YOY change: +5.23 percent

Monthly payment: $797.64

Salary: $34,184.64

  • Quarterly change: -$249.31

A 0.14-percent decline in mortgage rates was enough to offset a home-price increase of less than 1 percent, causing the required salary figure to improve by nearly $250. If home buyers in the Cleveland metro put 10 percent down instead of 20 percent, the required salary increases from $34,184.64 to $38,848.83.

Mortgage rate: 3.63 percent

  • Quarterly change: -0.16 percent

Home price: $157,000

  • Quarterly change: -2.24 percent
  • YOY change: +4.46 percent

Monthly payment: $842.74

Salary: $36,117.32

  • Quarterly change: -$1,061.87

Stronger declines in both rates and prices lowered the required salary figure by over $1,000 in the third quarter. If home buyers in the Cincinnati metro put 10 percent down instead of 20 percent, the required salary increases from $36,117.32 to $41,408.21.

Mortgage rate: 3.53 percent

  • Quarterly change: -0.17 percent

Home price: $170,000

  • Quarterly change: -0.18 percent
  • YOY change: +2.53 percent

Monthly payment: $875.62

Salary: $37,526.55

  • Quarterly change: -$604.67

Lower rates and nearly-stable home prices prompted the required salary to decline by about $600 in the third quarter. If home buyers in the St. Louis metro put 10 percent down instead of 20 percent, the required salary increases from $37,526.55 to $43,214.66.

Mortgage rate: 3.61 percent

  • Quarterly change: -0.17 percent

Home price: $170,817

  • Quarterly change: +4.03 percent
  • YOY change: +9.28 percent

Monthly payment: $910.78

Salary: $39,033.42

  • Quarterly change: +$491.59

Thanks to the second-highest price gain on our list for the third quarter, the required salary rose by nearly $500. If home buyers in the Detroit metro put 10 percent down instead of 20 percent, the required salary increases from $39,033.42 to $44,778.48.

Mortgage rate: 3.54 percent

  • Quarterly change: -0.17 percent

Home price: $191,500

  • Quarterly change: -0.26 percent
  • YOY change: +7.04 percent

Monthly payment: $918.98

Salary: $39,384.90

  • Quarterly change: -$707.23

Lower rates and stable home prices caused the required salary to decline by just over $700 in the third quarter. If home buyers in the Atlanta metro put 10 percent down instead of 20 percent, the required salary increases from $39,384.90 to $45,796.98.

Mortgage rate: 3.56 percent

  • Quarterly change: -0.15 percent

Home price: $235,300

  • Quarterly change: +0.26 percent
  • YOY change: +7.54 percent

Monthly payment: $1,029.68

Salary: $44,129.25

  • Quarterly change: -$586.74

Much like with the Atlanta metro, lower rates and stable prices caused the required salary figure to improve by nearly $600. If home buyers in the Phoenix metro put 10 percent down instead of 20 percent, the required salary increases from $44,129.25 to $52,019.20.

Mortgage rate: 3.66 percent

  • Quarterly change: -0.20 percent

Home price: $205,000

  • Quarterly change: +2.55 percent
  • YOY change: +15.17 percent

Monthly payment: $1,047.60

Salary: $44,897.28

  • Quarterly change: +$22.58

Despite having the lowest rates on our list, a quarterly price increase of over 2.5 percent increased the required salary by $23. If home buyers in the Tampa metro put 10 percent down instead of 20 percent, the required salary increases from $44,897.28 to $51,820.63.

Mortgage rate: 3.54 percent

  • Quarterly change: -0.17 percent

Home price: $212,300

  • Quarterly change: +0.86 percent
  • YOY change: +6.52 percent

Monthly payment: $1,127.95

Salary: $48,340.93

  • Quarterly change: -$412.05

Lower mortgage rates and a price increase of nearly 1 percent caused the required salary to decline by $412. If home buyers in the San Antonio metro put 10 percent down instead of 20 percent, the required salary increases from $48,340.93 to $55,449.46.

Mortgage rate: 3.61 percent

  • Quarterly change: -0.15 percent

Home price: $229,900

  • Quarterly change: +3.09 percent
  • YOY change: +14.21 percent

Monthly payment: $1,162.26

Salary: $49,811.12

  • Quarterly change: +$428.86

Lower mortgage rates were not enough to offset a home-price increase of 3 percent. The result was a salary increase of $429. If home buyers in the Orlando metro put 10 percent down instead of 20 percent, the required salary increases from $49,811.12 to $57,547.65.

We used standard 28 percent "front-end" debt ratios and a 20 percent down payment subtracted from the median-home-price data to arrive at our figures. Loans with less than a 20 percent down payment will incur mortgage insurance, which would in turn increase costs. We utilized the NAR's 2016 second-quarter data for median home prices and HSH.com’s 2016 second-quarter average interest rate for a 30-year, fixed-rate mortgages.

We created metropolitan-area average property tax information using data made available from the Census Bureau's American Community Survey (ACS). We use 2011-2013 ACS three-year estimates, which are the latest available data. We used the latest available data for statewide average homeowner insurance premium costs from the Insurance Information Institute.

PMI costs are for 30-year fixed-rate mortgages. For conforming loan amounts, these are insurance costs for FICO scores of greater than 720 but less than 759. You can calculate mortgage insurance costs for other credit scores, down payment amounts and mortgage types using HSH.com's PMI Cost Calculator.

Data for the Pittsburgh metro area was provided by RealSTATs, a locally owned and operated real estate information company. Home-price data for Detroit was provided by Realcomp II Ltd., Michigan's largest Multiple Listing Service.

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