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The salary you must earn to buy a home in 27 metros

 

How much salary do you need to earn in order to afford the principal, interest, taxes and insurance payments on a median-priced home in your metro area?

Cleveland Pittsburgh St. Louis Cincinnati Detroit Atlanta Tampa Phoenix Orlando San Antonio Minneapolis Dallas Houston Philadelphia Chicago Baltimore Sacramento Miami Denver Portland Seattle Washington Boston Los Angeles New York City San Diego San Francisco

 

Chicago

How much salary do you need to earn in order to afford the principal and interest payments on a median-priced home in your metro area?

To find out, HSH.com took the National Association of Realtors’ first-quarter data for median home prices and HSH.com’s first-quarter average interest rate for 30-year, fixed-rate mortgages to determine how much of your salary it would take to afford the base cost of owning a home--the principal, interest, taxes and insurance--in 27 metro areas.

We used standard 28 percent "front-end" debt ratios, and a 20 percent down payment subtracted from the NAR’s median-home-price data to arrive at our figures. The results are ranked from the lowest to highest salaries.

New for spring 2014: We've incorporated information on property taxes and homeowners insurance costs to more accurately reflect the income needed in a given market. We also included data on Detroit and Pittsburgh for the first time. Read more about the methodology and inputs on the final slide of this slideshow.

While overall, the NAR reported continued year-over-year price growth in the nation’s metro areas, the increases were smaller and a bit more sporadic. On a quarterly basis, more metros on our list experienced home price declines than increases. The price declines, as well as those metros that experienced minimum-price gains, were partially balanced out by a quarter that saw higher mortgage rates. Only three metro areas on our list had mortgage rates fall during the first quarter of 2014 compared to the previous quarter.

Overall, buying a home remained very favorable during the first quarter of 2014. It was nearly a 50-50 split between the areas which saw the required salary increase or decrease from the fourth quarter of 2013 to the first quarter of 2014.

Here’s a current look at how much salary you would need to earn in order to afford the principal and interest payments on a median-priced home in your metro.

Mortgage rate: 4.50 percent

  • Quarterly change: +0.06 percent

Home price: $102,100

  • Quarterly change: -9.49 percent
  • Year-over-year change (YOY): +1.1 percent

Monthly payment: $695.07

Salary: $29,788.67

  • Quarterly change: -$1,721.18

Cleveland remains the most affordable metro on our list again. The lack of consistent and significant price growth continues to hurt homeowners in Cleveland. But for homebuyers, the lack of price growth offered housing opportunities for those with smaller salaries in the first quarter.

Mortgage rate: 4.36 percent

  • Quarterly change: +0.04 percent

Home price: $120,000

  • Quarterly change: -6.69 percent
  • Year-over-year change (YOY): -1.8 percent

Monthly payment: $704.15

Salary: $30,177.78

  • Quarterly change: -$1,365.76

This is the first time Pittsburgh has been added to our list, and thanks to cheap home prices, the Steel City comes in at number two. We would like to thank RealSTATs for providing us with the Pittsburgh home price data.

Mortgage rate: 4.40 percent

  • Quarterly change: -0.01 percent

Home price: $120,500

  • Quarterly change: -7.52 percent
  • YOY change: +8.6 percent

Monthly payment: $729.76

Salary: $31,275.49

  • Quarterly change: -$1,708.95

St. Louis moved up one spot in affordability from last quarter, allowing homebuyers to make nearly $2,000 less and still be able to afford a median-priced home. Quarterly declines in both home prices and mortgage rates significantly improved affordability.

Mortgage rate: 4.53 percent

  • Quarterly change: +0.08 percent

Home price: $121,700

  • Quarterly change: -5.44 percent
  • YOY change: +0.6 percent

Monthly payment: $743.17

Salary: $31,850.18

  • Quarterly change: -$1,010.70

Cincinnati took one step back in affordability during the first quarter. Like its sister-city Cleveland, Cincinnati home prices struggled to gain positive ground over both the long- and short-term. Homebuyers in Cincinnati could have made more than $1,000 less in the beginning of the year and still have been able to afford their monthly mortgage payments.

Mortgage rate: 4.59 percent

  • Quarterly change: +0.10 percent

Home price: $110,750

  • Quarterly change: -9.72 percent
  • YOY change: +35.6 percent

Monthly payment: $752.51

Salary: $32,250.30

  • Quarterly change: -$1,843.92

This is the first time Detroit has been featured on our list. The housing market in Detroit needs no introduction. Given how hard the Motor City was hit by the downturn, residents of Detroit will take strong yearly price gains, even if quarterly volatility remains. We want to thank Realcomp II Ltd. for providing us with the Detroit home price data.

Mortgage rate: 4.44 percent

  • Quarterly change: -0.03 percent

Home price: $141,900

  • Quarterly change: -0.35 percent
  • YOY change: +23.3 percent

Monthly payment: $797.61

Salary: $34,183.44

  • Quarterly change: -$173.05

Small quarterly declines in both Atlanta mortgage rates and home prices kept things pretty stable in this Georgia metro area. Those regressions allowed the required salary figure to fall by nearly $200. A great sign for Atlanta’s current homeowners and homebuyers is its long-term home-price growth. Atlanta’s home prices have been posting some impressive YOY gains over the last few quarters.

Mortgage rate: 4.54 percent

  • Quarterly change: +0.04 percent

Home price: $145,000

  • Quarterly change: +1.83 percent 
  • YOY change: +7.4 percent

Monthly payment: $850.21

Salary: $36,437.56

  • Quarterly change: +$569.97

So far, Tampa is the first metro area to post a quarterly salary increase. Positive gains in mortgage rates and home prices took affordability in the wrong direction. But for Florida homeowners looking to build positive equity, this is a welcome sign.

Mortgage rate: 4.48 percent

  • Quarterly change: +0.07 percent

Home price: $194,300

  • Quarterly change: +0.83 percent 
  • YOY change: +15.0 percent

Monthly payment: $963.87

Salary: $41,308.74

  • Quarterly change: +$551.21

From the end of 2013 through the beginning of 2014, things have gotten far more affordable in Phoenix which moved from number 11 on our list last quarter up to number eight during the first quarter. Phoenix has experienced significant price growth over the last few years. Higher home prices mean buyers will need to earn over $500 more a year to afford a home in Phoenix.

Mortgage rate: 4.47 percent

  • Quarterly change: -0.01 percent

Home price: $178,000

  • Quarterly change: +7.36 percent 
  • YOY change: +18.7 percent

Monthly payment: $1,009.03

Salary: $43,243.95

  • Quarterly change: +$2,078.22

The largest salary bump on this list belongs to Orlando at over $2,000. Among the metros in this group, Orlando had the highest quarter-to-quarter home price increase by a wide margin. Like Ohio, Florida is a state with several metros still struggling to recover from the knocks they took during the downturn. If Orlando can keep up this pace, homeowners will once again feel confident in the value of their largest asset.

Mortgage rate: 4.62 percent

  • Quarterly change: +0.13 percent

Home price: $169,300

  • Quarterly change: -1.40 percent 
  • YOY change: +8.0 percent

Monthly payment: $1,038.47

Salary: $44,506

  • Quarterly change: +$33.36

San Antonio, the most affordable Texas metro we measure, remained pretty stable from the end of 2013 through the first three months of 2014. Creating this balance was an increase in interest rates and a small dip in home prices. All in all, the required salary in San Antonio went up by just over $30.

Mortgage rate: 4.52 percent

  • Quarterly change: +0.02 percent

Home price: $188,200

  • Quarterly change: -4.52 percent
  • YOY change: +10.3 percent

Monthly payment: $1,067.09

Salary: $45,732.39

  • Quarterly change: -$1,469.39

Minneapolis was a more affordable metro during the first quarter, moving from number 12 on our list to number 10 for the first quarter. The reason for this increase in affordability is simple: mortgage rates remained rather stable but home prices fell nearly 5 percent in the first three months of the year.

Mortgage rate: 4.48 percent

  • Quarterly change: +0.02 percent

Home price: $174,800

  • Quarterly change: +0.52 percent 
  • YOY change: +9.0 percent

Monthly payment: $1,113.20

Salary: $47,708.77

  • Quarterly change: +$226.71

When mortgage rates barely budge and home price move up modestly over a three-month period, the result in required salary amounts to an increase of almost $19 a month in Dallas. Not bad.

Mortgage rate: 4.49 percent

  • Quarterly change: +0.02 percent

Home price: $184,600

  • Quarterly change: +1.26 percent 
  • YOY change: +12.8 percent

Monthly payment: $1,144.19

Salary: $49,036.60

  • Quarterly change: +$473.28

In the third and final Texas metro, affordability in Houston became a little more strained compared with Dallas. The quarterly-price improvement in Houston was about double Dallas’s, allowing the required salary in Space City to increase by a similar amount.

Mortgage rate: 4.52 percent

  • Quarterly change: +0.09 percent

Home price: $201,800

  • Quarterly change:  -5.83 percent
  • YOY change: +2.1 percent

Monthly payment: $1,179.41

Salary: $50,546.25

  • Quarterly change: -$1,784.27

Homebuyers in the Philly metro are feeling the love of increased affordability as a 5.8-percent decline in quarterly home prices brought down the required salary by nearly $2,000. However, homeowners might be booing the fact that quarterly prices fell and YOY figures aren’t as strong as they’d like.

Mortgage rate: 4.52 percent

  • Quarterly change: +0.02 percent

Home price: $176,900

  • Quarterly change: -5.45 percent
  • YOY change: +11.0 percent

Monthly payment: $1,233.56

Salary: $52,866.88

  • Quarterly change: -$1,699.83

With a similar quarterly-price decline as Philadelphia's, it’s no wonder Chicago’s required salary fell by a similar amount. Home prices have been trending downward in the Windy City since the fourth quarter. If that trend continues, you’ll continue to see the Chicago metro move closer to number one on this list.

Mortgage rate: 4.44 percent

  • Quarterly change: +0.07 percent

Home price: $224,500

  • Quarterly change: -7.12 percent 
  • YOY change: -0.9 percent

Monthly payment: $1,238.50

Salary: $53,078.51

  • Quarterly change: -$2,624.26

Baltimore was king in terms of increased affordability during the first quarter as the required annual salary fell by some $2,700. In terms of the metros on this list, Charm City had the fourth-highest quarterly-price decline. Add to that a lack of long-term price growth and Baltimore’s affordability conditions are improving, much to the chagrin of homeowners who are trying to build equity or get top dollar for their homes when it comes time to sell.

Mortgage rate: 4.55 percent

  • Quarterly change: +0.02 percent

Home price: $255,800

  • Quarterly change: +2.17 percent 
  • YOY change: +22.2 percent

Monthly payment: $1,355.99

Salary: $58,113.87

  • Quarterly change: +$1,052.83

Sacramento marks the first of four metro areas in a row where affordability moved in the wrong direction. The story with the River City for the past few quarters has been its home prices. Sure, the quarterly gain doesn’t seem like much, but each quarter Sacramento’s YOY home-price gains are through the roof.  

Mortgage rate: 4.53 percent

  • Quarterly change: +0.06 percent

Home price: $259,000

  • Quarterly change: +1.61 percent
  • YOY change: +15.1 percent

Monthly payment: $1,393.80

Salary: $59,734.23

  • Quarterly change: +$1,026.33

The weather during the first quarter of 2014 was pretty untenable in the Northeast and Midwest. Luckily for the residents of the Miami metro area, not only was the weather warm and sunny, the housing markets continued to improve as well. Over the last year, home prices in the Miami metro have been trending upward like its sister-cities Tampa and Orlando. Florida has a long way to go, but it’s getting there.

Mortgage rate: 4.53 percent

  • Quarterly change: +0.04 percent

Home price: $288,400

  • Quarterly change: +3.26 percent 
  • YOY change: +10.4 percent

Monthly payment: $1,397.49

Salary: $59,892.46

  • Quarterly change: +$1,814.15

Denver has been known over the past few years as a stable housing market—one that never rose too fast or fell too hard. But that stability is beginning to be replaced by fast-moving seller’s market. Quickly rising home prices are prompting more sellers to list their homes. And why not, Denver-area Realtors are reporting that their homes are some of the fastest selling homes in the nation.

Mortgage rate: 4.57 percent

  • Quarterly change: +0.06 percent

Home price: $271,900

  • Quarterly change: +1.64 percent
  • YOY change: +10.3 percent

Monthly payment: $1,407.18

Salary: $60,307.71

  • Quarterly change: +$1,098.39

While the required salary didn’t increase as much in Portland as it did in Denver, it was still the fourth-highest increase on our list. Portland is the last metro area in our group to have a home price under $300,000. But add steady price and rate gains and Portland is the first city to crack the $60,000-salary mark.

Mortgage rate: 4.59 percent

  • Quarterly change: +0.07 percent

Home price: $339,900

  • Quarterly change: -1.31 percent
  • YOY change: +8.7 percent

Monthly payment: $1,723.19

Salary: $73,851.06

  • Quarterly change: -$297.32

As usual, here is where things start to get expensive. A home price of nearly $400,000 and the second-highest mortgage rate on our list produces a required salary over $13,000 higher than the metro before it.

Mortgage rate: 4.45 percent

  • Quarterly change: +0.07 percent

Home price: $358,900

  • Quarterly change: -2.47 percent
  • YOY change: +2.9 percent

Monthly payment: $1,831.75

Salary: $78,503.56

  • Quarterly change: -$1,049.44

Things were more affordable in D.C. during the first three months of the year. Like Denver, Washington, D.C.,’s housing market has had a reputation of stable, consistent growth. But since the second quarter of 2013, prices have been falling, taking the required salary down with it.

Mortgage rate: 4.47 percent

  • Quarterly change: +0.06 percent

Home price: $363,200

  • Quarterly change: -2.18 percent
  • YOY change: +9.3 percent

Monthly payment: $1,862.47

Salary: $79,820.01

  • Quarterly change: -$949.94

Boston home prices were on a roll in 2013 until they fell back in the fourth quarter. Prices in Bean Town continued to slump at the start of 2014. But if you’re one of the few who can afford a home in this pricey metro, Boston's price decline improves your bottom line to the tune of $950.

Mortgage rate: 4.52 percent

  • Quarterly change: +0.06 percent

Home price: $406,200

  • Quarterly change: -3.99 percent
  • YOY change: +17.6 percent

Monthly payment: $2,005.85

Salary: $85,964.88

  • Quarterly change: -$2,424.18

The state of California is one of the most interesting real estate markets in the country currently, mainly because demand is as hot as ever. Despite home prices that would be out of reach for most in this country, Los Angeles had the second-best improvement in required salary (behind Sacramento, of course).

Mortgage rate: 4.53 percent

  • Quarterly change: +0.05 percent

Home price: $388,900

  • Quarterly change: +0.67 percent
  • YOY change: +5.6 percent

Monthly payment: $2,095.07

Salary: $89,788.69

  • Quarterly change: +$846.86

Taking a bite out of the Big Apple’s real estate market is only reserved for those with a strong stomach. With median-home prices pushing $400,000, home prices that saw both quarterly and YOY increases, it’s no wonder you need a minimum salary of nearly $90,000 to purchase the median-priced home in the NYC metro area.

Mortgage rate: 4.56 percent

  • Quarterly change: +0.03 percent

Home price: $483,000

  • Quarterly change: +1.30 percent
  • YOY change: +17.1 percent

Monthly payment: $2,299.13

Salary: $98,534.22

  • Quarterly change: +$1,378.56

San Diego, the middle child of the expensive California metros, was even less affordable than usual during the first part of the year. With a median home price of $483,000 and positive home-price growth over the previous quarter and past year, the required salary to afford a home in this southern California metro area is inching toward $100,000.

Mortgage rate: 4.39 percent (jumbo rate)

  • Quarterly change: no change

Home price: $679,800

  • Quarterly change: -0.38 percent
  • YOY change: +14.5 percent

Monthly payment: $3,199.69

Salary: $137,129.55

  • Quarterly change: -$447.58

If it seems odd that the San Francisco metro area, the king of unaffordable housing, has the lowest mortgage rates on our list two quarters in a row, it’s for good reason. The mortgage rate you see here is a jumbo mortgage rate. The jumbo market is so competitive in California that jumbo mortgage rates have actually helped to offset some of those higher costs.  

For the results presented on these pages, and incorporating the information discussed below, HSH.com calculated the income required to cover the mortgage's principal, interest, tax and insurance payment. 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 the required salary figure.

We utilized the NAR’s 2014 first-quarter data for median home prices as well as our 2014 first-quarter average interest rate for a 30-year, fixed-rate mortgages to determine how much money homebuyers in 27 major metro areas would need to earn in order to purchase the median-priced home in their market.

The average mortgage rate information we utilized was for purchase-money mortgages made to borrowers with good to excellent credit.

We created metropolitan-area average property tax information from data made available from the Tax Foundation (http://www.taxfoundation.org), a non-partisan research think tank, based in Washington, D.C.

We utilized statewide average homeowner insurance premium costs made available by the Insurance Information Institute (http://www.iii.org), whose mission is to improve public understanding of insurance - what it does and how it works.

Note: Property taxes and insurance costs are specific to an individual property itself and will be different for any single property in which you may have an interest. Also, if other personal debts exceed 8 percent of a given monthly gross income, this will increase the salary needed to qualify.

Data for the Pittsburgh metro area was provided by RealSTATs (http://www.realstats.net/index.php), a locally owned and operated real estate information company. Home-price data for Detroit was provided by Realcomp II Ltd. (http://realcomp.moveinmichigan.com/), Michigan’s largest Multiple Listing Service.

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Cities 30-Year Fixed Mortgage Rate % Change from 4Q13 Median Home Price % Change from 4Q13 Monthly Payment (PITI) Salary Needed
Cleveland 4.50% 0.06 $102,100 -9.49 $695.07 $29,788.67
Pittsburgh 4.36% 0.04 $120,000 -6.69 $704.15 $30,177.78
St. Louis 4.40% -0.01 $120,500 -7.52 $729.76 $31,275.49
Cincinnati 4.53% 0.08 $121,700 -5.44 $743.17 $31,850.18
Detroit 4.59% 0.10 $110,750 -9.72 $752.51 $32,250.30
Atlanta 4.44% -0.03 $141,900 -0.35 $797.61 $34,183.44
Tampa 4.54% 0.04 $145,000 1.83 $850.21 $36,437.56
Phoenix 4.48% 0.07 $194,300 0.83 $963.87 $41,308.74
Orlando 4.47% -0.01 $178,000 7.36 $1,009.03 $43,243.95
San Antonio 4.62% 0.13 $169,300 -1.40 $1,038.47 $44,506.00
Minneapolis 4.52% 0.02 $188,200 -4.52 $1,067.09 $45,732.39
Dallas 4.48% 0.02 $174,800 0.52 $1,113.20 $47,708.77
Houston 4.49% 0.02 $184,600 1.26 $1,144.19 $49,036.60
Philadelphia 4.52% 0.09 $201,800 -5.83 $1,179.41 $50,546.25
Chicago 4.52% 0.02 $176,900 -5.45 $1,233.56 $52,866.88
Baltimore 4.44% 0.07 $224,500 -7.12 $1,238.50 $53,078.51
Sacramento 4.55% 0.02 $255.800 2.17 $1,355.99 $58,113.87
Miami 4.53% 0.06 $259,000 1.61 $1,393.80 $59,734.23
Denver 4.53% 0.04 $288,400 3.26 $1,397.49 $59,892.46
Portland 4.57% 0.06 $271,900 1.64 $1,407.18 $60,307.71
Seattle 4.59% 0.07 $339,900 -1.31 $1,723.19 $73,851.06
Washington D.C. 4.45% 0.07 $358,900 -2.47 $1,831.75 $78,503.56
Boston 4.47% 0.06 $363,200 -2.18 $1,862.47 $79,820.01
Los Angeles 4.52% 0.06 $406,200 -3.99 $2,005.85 $85,964.88
New York City 4.53% 0.05 $388,900 0.67 $2,095.07 $89,788.69
San Diego 4.56% 0.03 $483,000 1.30 $2,299.13 $98,534.22
San Francisco 4.39% 0.00 $679,800 -0.38 $3,199.69 $137,129.55
 

30 Yr. Fixed - Refinance Rates from Our Lenders in Virginia

Lenders
Rate
APR
Monthly Payment
Ditech.com
4.125%
4.181%
$969
Capital One
4.125%
4.328%
$969
Discover
3.990%
4.222%
$954
Last Updates: 07/31/2014 See More Rates