See below exactly how much salary you would need to earn in order to afford the principal, interest, taxes and insurance payments on a median-priced home in the 50 most populous metropolitan areas.
Key takeaways:
Although there were again a sizable number of metropolitan areas where home prices declined on a quarter-to-quarter basis, it would be wrong to think buying a home is getting more affordable this spring. In fact, just one market of the top 50 showed a year-over-year decline in the median price of a home sold in the first quarter of 2018, and this may have more to do with lousy weather and a change in the mix of homes sold than a true shift in the market.
In fact, the opposite is quite true: home price continue steady (and sometimes spectacular) increases, challenging affordability in both expected and unexpected places. While it has been widely reported that hot markets continue to drive home prices in places like the Seattle, Denver and Los Angeles metro areas, an eyebrow or two might be raised when news that metro areas like Las Vegas, Salt Lake City, Jacksonville, Minneapolis, Indianapolis and Kansas City (among others) area all sporting double-digit year-over-year price gains.
With only the Philadelphia metro area seeing a price reduction of 5.79 percent, the counterbalance at the other end of the price increase spectrum was the San Jose metro area, where tech-fueled home values posted a 28.32% year-over-year increase. Even with a 20% down payment, a potential homebuyer in this market will need to carry a mortgage in excess of a million dollars. This leads the next most expensive market (the San Francisco metropolitan area) by a wide margin, and is more than ten times the amount of mortgage needed in the most affordable market (the Pittsburgh metro area).
Higher home costs are also coming at a time when mortgage rates have continued to move materially higher. Thirty-year fixed mortgage rates were up by more than a third of a percentage point on average during the period, so the affordability pinch would still have been evident even absent rising home costs.
National Association or Realtors Chief Economist Lawrence Yun noted that “Rapid price gains and the quick hike in mortgage rates are essentially eliminating any meaningful gains buyers may be seeing from the combination of improving wage growth and larger paychecks following this year’s tax cuts. It’s simple: homebuilders need to start constructing more single-family homes and condominiums to overcome the rampant supply shortages that are hampering affordability."
Builders are adding more homes, but continue to do so at a measured pace. However, new homes don't much help with the affordability problem -- the national median price of an existing single family home was $245,500 in the first quarter, while the median cost of a brand new single-family home was $331,700 over the same period. The two aren't directly comparable, of course, but it's not as though a potential homebuyer can suddenly come up with another $15,000 in annual income to cover the larger mortgage needed to purchase a new home. Perhaps as important, it also means that a seller of an existing home that wants to trade up needs to demand a price high enough as to make the leap to this new price tier more palatable.
As has been the case, there's little for homebuyers to buy, and what housing stock is available is commanding higher and higher prices. Given current conditions, it's not likely that mortgage rates will decline significantly, providing relief, or that factors currently limiting supply of homes to buy will suddenly shift. In fact, and as we noted in the MarketTrends back on April 13, "...it might be that much higher interest rates may be the only immediate solution for quelling demand, as this would tend to knock more marginal borrowers out of the market. In turn, this would slow the pace of sales and loosen up inventories of unsold homes, and (if sustained) would tend to at least temper increases in home prices...".
Overall, home sales have been without much regular traction. As we're now in the middle of the "traditional spring homebuying season", it will be a while yet until we get a full look at any damage to sales as a result of these increasingly tricky market conditions. Given higher prices and higher fixed mortgage interest rates, one market shift to watch for is an increase in the use of ARMs, which offer lower initial interest rates and can help improve affordability.
PLEASE SEE: Metro area definitions
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The salary you must earn to buy a home in the 50 largest metros
How much salary do you need to earn in order to afford the principal, interest, tax and insurance payments on a median-priced home in your metro area? For our calculations, HSH.com uses the National Association of Realtors’ 2018 first-quarter data for median-home prices, national mortgage rate data derived from weekly surveys by Freddie Mac and the Mortgage Bankers Association of America for 30-year fixed rate mortgages and available property tax and homeowners insurance costs to determine the annual salary it takes to afford the base cost of owning a home (principal, interest, property tax and homeowner's insurance, or PITI) in the nation's 50 largest metropolitan 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. We've incorporated available information on property taxes and homeowner’s insurance costs to more accurately reflect the income needed in a given market. Read more about the methodology and inputs on the final slide of this slideshow. In the commentary section of each slide, we provide data to show how the required salary would change if you were to make a 10 percent down payment instead of a 20 percent. As we work from a fixed median home price, a smaller down payment means both a larger loan amount and the need to pay for private mortgage insurance, which in turn means even higher salary requirements. Here’s a current look at how much salary you would need to earn in order to afford the principal, interest, taxes and insurance payments on a median-priced home in your metro area.
National: $56,110.22
Mortgage rate: 4.41 percent
Home price: $245,500
Monthly payment: $1,309.24 Salary: $56,110.22
If a homebuyer wants to buy the National median-priced home with only 10 percent down instead of 20 percent, the required salary increases to $64,620.49
Atlanta: $45,284.07
Mortgage rate: 4.41 percent
Home price: $204,500
Monthly payment: $1,056.63 Salary: $45,284.07
If homebuyers in the Atlanta metro put 10 percent down instead of 20 percent, the required salary increases from $45,284.07 to $52,373.08.
Austin: $69,971.67
Mortgage rate: 4.41 percent
Home price: $296,400
Monthly payment: $1,632.67 Salary: $69,971.67
If homebuyers in the Austin metro put 10 percent down instead of 20 percent, the required salary increases from $69,971.67 to $80,246.40.
Baltimore: $58,537.59
Mortgage rate: 4.41 percent
Home price: $253,700
Monthly payment: $1,365.88 Salary: $58,537.59
If homebuyers in the Baltimore metro put 10 percent down instead of 20 percent, the required salary increases from $58,537.59 to $67,332.12.
Birmingham: $40,926.30
Mortgage rate: 4.41 percent
Home price: $193,900
Monthly payment: $954.95 Salary: $40,926.30
If homebuyers in the Birmingham metro put 10 percent down instead of 20 percent, the required salary increases from $40,926.30 to $47,647.86.
Boston: $97,735.90
Mortgage rate: 4.41 percent
Home price: $442,700
Monthly payment: $2,280.50 Salary: $97,735.90
If homebuyers in the Boston metro put 10 percent down instead of 20 percent, the required salary increases from $97,735.90 to $113,082.13.
Buffalo: $40,704.15
Mortgage rate: 4.41 percent
Home price: $138,400
Monthly payment: $949.76 Salary: $40,704.15
If homebuyers in the Buffalo metro put 10 percent down instead of 20 percent, the required salary increases from $40,704.15 to $45,501.80.
Charlotte: $48,234.22
Mortgage rate: 4.41 percent
Home price: $226,400
Monthly payment: $1,125.47 Salary: $48,234.22
If homebuyers in the Charlotte metro put 10 percent down instead of 20 percent, the required salary increases from $48,234.22 to $56,082.39.
Chicago: $62,622.21
Mortgage rate: 4.41 percent
Home price: $242,100
Monthly payment: $1,461.18 Salary: $62,622.21
If homebuyers in the Chicago metro put 10 percent down instead of 20 percent, the required salary increases from $62,622.21 to $71,014.63.
Cincinnati: $39,099.34
Mortgage rate: 4.41 percent
Home price: $157,300
Monthly payment: $912.32 Salary: $39,099.34
If homebuyers in the Cincinnati metro put 10 percent down instead of 20 percent, the required salary increases from $39,099.34 to $44,552.15.
Cleveland: $35,561.88
Mortgage rate: 4.41 percent
Home price: $133,500
Monthly payment: $829.78 Salary: $35,561.88
If homebuyers in the Cleveland metro put 10 percent down instead of 20 percent, the required salary increases from $35,561.88 to $40,189.67.
Columbus: $44,735.08
Mortgage rate: 4.41 percent
Home price: $185,100
Monthly payment: $1,043.82 Salary: $44,735.08
If homebuyers in the Columbus metro put 10 percent down instead of 20 percent, the required salary increases from $44,735.08 to $51,151.59.
Dallas: $61,961.20
Mortgage rate: 4.41 percent
Home price: $250,700
Monthly payment: $1,445.76 Salary: $61,961.20
If homebuyers in the Dallas metro put 10 percent down instead of 20 percent, the required salary increases from $61,961.20 to $70,651.73.
Denver: $87,222.49
Mortgage rate: 4.41 percent
Home price: $441,500
Monthly payment: $2,035.19 Salary: $87,222.49
If homebuyers in the Denver metro put 10 percent down instead of 20 percent, the required salary increases from $87,222.49 to $102,527.12.
Detroit: $42,604.64
Mortgage rate: 4.41 percent
Home price: $175,220
Monthly payment: $994.11 Salary: $42,604.64
If homebuyers in the Detroit metro put 10 percent down instead of 20 percent, the required salary increases from $42,604.64 to $48,678.66.
Hartford: $60,848.43
Mortgage rate: 4.41 percent
Home price: $221,600
Monthly payment: $1,419.80 Salary: $60,848.43
If homebuyers in the Hartford metro put 10 percent down instead of 20 percent, the required salary increases from $60,848.43 to $68,530.21.
Houston: $57,925.80
Mortgage rate: 4.41 percent
Home price: $229,800
Monthly payment: $1,351.60 Salary: $57,925.80
If homebuyers in the Houston metro put 10 percent down instead of 20 percent, the required salary increases from $57,925.80 to $65,891.83.
Indianapolis: $38,613.05
Mortgage rate: 4.41 percent
Home price: $176,100
Monthly payment: $900.97 Salary: $38,613.05
If homebuyers in the Indianapolis metro put 10 percent down instead of 20 percent, the required salary increases from $38,613.05 to $44,717.57.
Jacksonville: $54,118.61
Mortgage rate: 4.41 percent
Home price: $240,500
Monthly payment: $1,262.77 Salary: $54,118.61
If homebuyers in the Jacksonville metro put 10 percent down instead of 20 percent, the required salary increases from $54,118.61 to $62,455.57.
Kansas City: $46,018.78
Mortgage rate: 4.41 percent
Home price: $197,700
Monthly payment: $1,073.77 Salary: $46,018.78
If homebuyers in the Kansas City metro put 10 percent down instead of 20 percent, the required salary increases from $46,018.78 to $52,872.06.
Las Vegas: $54,420.24
Mortgage rate: 4.41 percent
Home price: $270,200
Monthly payment: $1,269.81 Salary: $54,420.24
If homebuyers in the Las Vegas metro put 10 percent down instead of 20 percent, the required salary increases from $54,420.24 to $63,786.74.
Los Angeles: $110,052.84
Mortgage rate: 4.41 percent
Home price: $545,500
Monthly payment: $2,567.90 Salary: $110,052.84
If homebuyers in the Los Angeles metro put 10 percent down instead of 20 percent, the required salary increases from $110,052.84 to $131,512.27.
Louisville: $38,575.62
Mortgage rate: 4.41 percent
Home price: $170,400
Monthly payment: $900.10 Salary: $38,575.62
If homebuyers in the Louisville metro put 10 percent down instead of 20 percent, the required salary increases from $38,575.62 to $44,482.55.
Memphis: $37,795.44
Mortgage rate: 4.41 percent
Home price: $164,300
Monthly payment: $881.89 Salary: $37,795.44
If homebuyers in the Memphis metro put 10 percent down instead of 20 percent, the required salary increases from $37,795.44 to $43,490.91.
Miami: $74,300.45
Mortgage rate: 4.41 percent
Home price: $340,000
Monthly payment: $1,733.68 Salary: $74,300.45
If homebuyers in the Miami metro put 10 percent down instead of 20 percent, the required salary increases from $74,300.45 to $86,086.57.
Milwaukee: $55,574.84
Mortgage rate: 4.41 percent
Home price: $226,200
Monthly payment: $1,296.75 Salary: $55,574.84
If homebuyers in the Milwaukee metro put 10 percent down instead of 20 percent, the required salary increases from $55,574.84 to $63,416.08.
Minneapolis: $59,128.55
Mortgage rate: 4.41 percent
Home price: $260,400
Monthly payment: $1,379.67 Salary: $59,128.55
If homebuyers in the Minneapolis metro put 10 percent down instead of 20 percent, the required salary increases from $59,128.55 to $68,155.34.
Nashville: $52,439.80
Mortgage rate: 4.41 percent
Home price: $252,300
Monthly payment: $1,223.60 Salary: $52,439.80
If homebuyers in the Nashville metro put 10 percent down instead of 20 percent, the required salary increases from $52,439.80 to $61,185.80.
New Orleans: $44,604.90
Mortgage rate: 4.41 percent
Home price: $195,500
Monthly payment: $1,040.78 Salary: $44,604.90
If homebuyers in the New Orleans metro put 10 percent down instead of 20 percent, the required salary increases from $44,604.90 to $51,381.92.
New York City: $97,564.91
Mortgage rate: 4.41 percent
Home price: $389,700
Monthly payment: $2,276.51 Salary: $97,564.91
If homebuyers in the New York City metro put 10 percent down instead of 20 percent, the required salary increases from $97,564.91 to $111,073.89.
Oklahoma City: $37,035.56
Mortgage rate: 4.41 percent
Home price: $147,600
Monthly payment: $864.16 Salary: $37,035.56
If homebuyers in the Oklahoma City metro put 10 percent down instead of 20 percent, the required salary increases from $37,035.56 to $42,152.12.
Orlando: $57,132.48
Mortgage rate: 4.41 percent
Home price: $255,000
Monthly payment: $1,333.09 Salary: $57,132.48
If homebuyers in the Orlando metro put 10 percent down instead of 20 percent, the required salary increases from $57,132.48 to $65,972.07.
Philadelphia: $50,959.83
Mortgage rate: 4.41 percent
Home price: $196,900
Monthly payment: $1,189.06 Salary: $50,959.83
If homebuyers in the Philadelphia metro put 10 percent down instead of 20 percent, the required salary increases from $50,959.83 to $57,785.39.
Phoenix: $52,677.45
Mortgage rate: 4.41 percent
Home price: $261,100
Monthly payment: $1,229.14 Salary: $52,677.45
If homebuyers in the Phoenix metro put 10 percent down instead of 20 percent, the required salary increases from $52,677.45 to $61,728.50.
Pittsburgh: $34,555.43
Mortgage rate: 4.41 percent
Home price: $135,000
Monthly payment: $806.29 Salary: $34,555.43
If homebuyers in the Pittsburgh metro put 10 percent down instead of 20 percent, the required salary increases from $34,555.43 to $39,235.22.
Portland: $79,458.35
Mortgage rate: 4.41 percent
Home price: $384,800
Monthly payment: $1,854.03 Salary: $79,458.35
If homebuyers in the Portland metro put 10 percent down instead of 20 percent, the required salary increases from $79,458.35 to $92,797.48.
Providence: $66,412.91
Mortgage rate: 4.41 percent
Home price: $269,800
Monthly payment: $1,549.63 Salary: $66,412.91
If homebuyers in the Providence metro put 10 percent down instead of 20 percent, the required salary increases from $66,412.91 to $75,765.55.
Raleigh: $57,521.42
Mortgage rate: 4.41 percent
Home price: $274,300
Monthly payment: $1,342.17 Salary: $57,521.42
If homebuyers in the Raleigh metro put 10 percent down instead of 20 percent, the required salary increases from $57,521.42 to $67,030.05.
Richmond: $53,170.84
Mortgage rate: 4.41 percent
Home price: $253,000
Monthly payment: $1,240.65 Salary: $53,170.84
If homebuyers in the Richmond metro put 10 percent down instead of 20 percent, the required salary increases from $53,170.84 to $61,941.10.
Riverside/San Bernardino: $72,251.51
Mortgage rate: 4.41 percent
Home price: $350,000
Monthly payment: $1,685.87 Salary: $72,251.51
If homebuyers in the Riverside/San Bernardino metro put 10 percent down instead of 20 percent, the required salary increases from $72,251.51 to $84,384.29.
Sacramento: $75,050.25
Mortgage rate: 4.41 percent
Home price: $355,000
Monthly payment: $1,751.17 Salary: $75,050.25
If homebuyers in the Sacramento metro put 10 percent down instead of 20 percent, the required salary increases from $75,050.25 to $87,356.36.
Salt Lake City: $63,867.10
Mortgage rate: 4.41 percent
Home price: $322,000
Monthly payment: $1,490.23 Salary: $63,867.10
If homebuyers in the Salt Lake City metro put 10 percent down instead of 20 percent, the required salary increases from $63,867.10 to $75,029.26.
San Antonio: $54,691.46
Mortgage rate: 4.41 percent
Home price: $218,900
Monthly payment: $1,276.13 Salary: $54,691.46
If homebuyers in the San Antonio metro put 10 percent down instead of 20 percent, the required salary increases from $54,691.46 to $62,279.65.
San Diego: $121,703.47
Mortgage rate: 4.53 percent
Home price: $610,000
Monthly payment: $2,839.75 Salary: $121,703.47
If homebuyers in the San Diego metro put 10 percent down instead of 20 percent, the required salary increases from $121,703.47 to $144,211.67.
San Francisco: $181,777.09
Mortgage rate: 4.53 percent
Home price: $917,000
Monthly payment: $4,241.46 Salary: $181,777.09
If homebuyers in the San Francisco metro put 10 percent down instead of 20 percent, the required salary increases from $181,777.09 to $215,613.19.
San Jose: $262,115.51
Mortgage rate: 4.53 percent
Home price: $1,373,000
Monthly payment: $6,116.03 Salary: $262,115.51
If homebuyers in the San Jose metro put 10 percent down instead of 20 percent, the required salary increases from $262,115.51 to $310,129.49.
Seattle: $98,678.80
Mortgage rate: 4.41 percent
Home price: $484,400
Monthly payment: $2,302.51 Salary: $98,678.80
If homebuyers in the Seattle metro put 10 percent down instead of 20 percent, the required salary increases from $98,678.80 to $117,734.62.
St Louis: $40,004.56
Mortgage rate: 4.41 percent
Home price: $162,400
Monthly payment: $933.44 Salary: $40,004.56
If homebuyers in the St Louis metro put 10 percent down instead of 20 percent, the required salary increases from $40,004.56 to $45,634.17.
Tampa: $51,054.29
Mortgage rate: 4.41 percent
Home price: $225,000
Monthly payment: $1,191.27 Salary: $51,054.29
If homebuyers in the Tampa metro put 10 percent down instead of 20 percent, the required salary increases from $51,054.29 to $58,853.93.
Virginia Beach: $48,361.76
Mortgage rate: 4.41 percent
Home price: $218,000
Monthly payment: $1,128.44 Salary: $48,361.76
If homebuyers in the Virginia Beach metro put 10 percent down instead of 20 percent, the required salary increases from $48,361.76 to $55,918.74.
Washington, D.C.: $85,512.09
Mortgage rate: 4.41 percent
Home price: $394,400
Monthly payment: $1,995.28 Salary: $85,512.09
If homebuyers in the Washington, D.C. metro put 10 percent down instead of 20 percent, the required salary increases from $85,512.09 to $99,184.00.
How did we come up with these salaries?
To compile these results, HSH.com calculates the annual before-tax income required to cover the mortgage's principal, interest, property tax and homeowner's insurance payment. We use 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 and require Private Mortgage Insurance. Results using smaller down payments and including PMI costs are provided on each market's slide. We utilized the National Association of Realtors 2018 first-quarter data for median home prices. For mortgage data, we create a quarterly average of mortgage rates from survey data published by Freddie Mac (conforming loans) and the Mortgage Bankers Association of America (jumbo loans) for a 30-year, fixed-rate mortgage. The average mortgage rate information we used was for purchase-money mortgages made to borrowers with good to excellent credit. Into our calculations, we incorporate metropolitan-area average property tax information using data made available from the Census Bureau's American Community Survey (ACS). We use 2010-2015 ACS 5-year estimates, which are the latest available data. For homeowner's insurance costs, we use the latest available data for statewide average homeowner insurance premium costs from the Insurance Information Institute (http://www.iii.org), whose mission is to improve public understanding of insurance. 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 one's given monthly gross income, this may increase the salary needed to qualify. PMI costs used in our calculations are for 30-year fixed-rate mortgages. For conforming loan amounts, these are costs for FICO scores of greater than 740 but less than 759; for jumbo loan amounts, these costs are for FICO scores of 760 or greater. 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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National data and all 50 metros, sorted alphabetically
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?
| Metro Area | 30-Year Fixed Mortgage Rate | % Change from 4Q17 | Median Home Price | % Change from 4Q17 | Monthly Payment (PITI) | Salary Needed |
| National | 4.41% | +0.36% | $245,500 | -0.93% | $1,309.24 | $56,110.22 |
| Atlanta | 4.41% | +0.36% | $204,500 | +2.82% | $1,056.63 | $45,284.07 |
| Austin | 4.41% | +0.36% | $296,400 | +1.09% | $1,632.67 | $69,971.67 |
| Baltimore | 4.41% | +0.36% | $253,700 | -1.44% | $1,365.88 | $58,537.59 |
| Birmingham | 4.41% | +0.36% | $193,900 | -0.82% | $954.95 | $40,926.30 |
| Boston | 4.41% | +0.36% | $442,700 | -1.29% | $2,280.50 | $97,735.90 |
| Buffalo | 4.41% | +0.36% | $138,400 | -5.34% | $949.76 | $40,704.15 |
| Charlotte | 4.41% | +0.36% | $226,400 | +1.30% | $1,125.47 | $48,234.22 |
| Chicago | 4.41% | +0.36% | $242,100 | +2.24% | $1,461.18 | $62,622.21 |
| Cincinnati | 4.41% | +0.36% | $157,300 | -1.01% | $912.32 | $39,099.34 |
| Cleveland | 4.41% | +0.36% | $133,500 | -4.91% | $829.78 | $35,561.88 |
| Columbus | 4.41% | +0.36% | $185,100 | -2.73% | $1,043.82 | $44,735.08 |
| Dallas | 4.41% | +0.36% | $250,700 | +1.87% | $1,445.76 | $61,961.20 |
| Denver | 4.41% | +0.36% | $441,500 | +6.54% | $2,035.19 | $87,222.49 |
| Detroit | 4.41% | +0.36% | $175,220 | -2.87% | $994.11 | $42,604.64 |
| Hartford | 4.41% | +0.36% | $221,600 | -0.98% | $1,419.80 | $60,848.43 |
| Houston | 4.41% | +0.36% | $229,800 | +0.00% | $1,351.60 | $57,925.80 |
| Indianapolis | 4.41% | +0.36% | $176,100 | +2.15% | $900.97 | $38,613.05 |
| Jacksonville | 4.41% | +0.36% | $240,500 | +4.34% | $1,262.77 | $54,118.61 |
| Kansas City | 4.41% | +0.36% | $197,700 | +2.01% | $1,073.77 | $46,018.78 |
| Las Vegas | 4.41% | +0.36% | $270,200 | +1.27% | $1,269.81 | $54,420.24 |
| Los Angeles | 4.41% | +0.36% | $545,500 | -1.41% | $2,567.90 | $110,052.84 |
| Louisville | 4.41% | +0.36% | $170,400 | -1.10% | $900.10 | $38,575.62 |
| Memphis | 4.41% | +0.36% | $164,300 | -1.44% | $881.89 | $37,795.44 |
| Miami | 4.41% | +0.36% | $340,000 | +1.49% | $1,733.68 | $74,300.45 |
| Milwaukee | 4.41% | +0.36% | $226,200 | -3.46% | $1,296.75 | $55,574.84 |
| Minneapolis | 4.41% | +0.36% | $260,400 | +4.08% | $1,379.67 | $59,128.55 |
| Nashville | 4.41% | +0.36% | $252,300 | +0.72% | $1,223.60 | $52,439.80 |
| New Orleans | 4.41% | +0.36% | $195,500 | -2.25% | $1,040.78 | $44,604.90 |
| New York City | 4.41% | +0.36% | $389,700 | -1.57% | $2,276.51 | $97,564.91 |
| Oklahoma City | 4.41% | +0.36% | $147,600 | -3.47% | $864.16 | $37,035.56 |
| Orlando | 4.41% | +0.36% | $255,000 | +2.00% | $1,333.09 | $57,132.48 |
| Philadelphia | 4.41% | +0.36% | $196,900 | -12.33% | $1,189.06 | $50,959.83 |
| Phoenix | 4.41% | +0.36% | $261,100 | +3.37% | $1,229.14 | $52,677.45 |
| Pittsburgh | 4.41% | +0.36% | $135,000 | +0.00% | $806.29 | $34,555.43 |
| Portland | 4.41% | +0.36% | $384,800 | +1.16% | $1,854.03 | $79,458.35 |
| Providence | 4.41% | +0.36% | $269,800 | -3.19% | $1,549.63 | $66,412.91 |
| Raleigh | 4.41% | +0.36% | $274,300 | +3.90% | $1,342.17 | $57,521.42 |
| Richmond | 4.41% | +0.36% | $253,000 | +3.27% | $1,240.65 | $53,170.84 |
| Riverside/San Bernardino | 4.41% | +0.36% | $350,000 | +2.94% | $1,685.87 | $72,251.51 |
| Sacramento | 4.41% | +0.36% | $355,000 | +1.46% | $1,751.17 | $75,050.25 |
| Salt Lake City | 4.41% | +0.36% | $322,000 | +2.84% | $1,490.23 | $63,867.10 |
| San Antonio | 4.41% | +0.36% | $218,900 | +0.51% | $1,276.13 | $54,691.46 |
| San Diego | 4.53% | +0.33% | $610,000 | +0.00% | $2,839.75 | $121,703.47 |
| San Francisco | 4.53% | +0.33% | $917,000 | -0.33% | $4,241.46 | $181,777.09 |
| San Jose | 4.53% | +0.33% | $1,373,000 | +8.11% | $6,116.03 | $262,115.51 |
| Seattle | 4.41% | +0.36% | $484,400 | +2.69% | $2,302.51 | $98,678.80 |
| St Louis | 4.41% | +0.36% | $162,400 | -2.58% | $933.44 | $40,004.56 |
| Tampa | 4.41% | +0.36% | $225,000 | +0.90% | $1,191.27 | $51,054.29 |
| Virginia Beach | 4.41% | +0.36% | $218,000 | -0.91% | $1,128.44 | $48,361.76 |
| Washington, D.C. | 4.41% | +0.36% | $394,400 | -0.68% | $1,995.28 | $85,512.09 |
NYC @ $419k median home price is an absolutely joke. The median price is double that number, so salary "guesstimate" on this article is half of what would be needed, so you can double that $99k annual salary to $180,000. These numbers are far from accurate. Pass on any data contained here.
Reply»If you take the time to check the "metro definitions page" you'll find that the OMB definition of the metro area is quite expansive and well beyond Manhattan and the five boroughs. The area includes the counties of Bronx, Kings, New York, Queens, Richmond, Nassau, Suffolk, Putnam, Rockland, Westchester (NY); Essex, Hunterdon, Morris, Somerset, Sussex, Union, Bergen, Hudson, Middlesex, Monmouth, Ocean, Passaic (NJ); Dutchess, Orange (NY), Pike (PA), and we stand by our calculation (for details, check the "About" slide).
Reply »Just wondering what you consider a "home". The claim that the median price of a "home" in Miami is $340,000 makes me think that even studio apartments are counted in this equation. I don't think you can find a home for $340,000 in Miami unless you are including studio apartments. The houses in my Miami neighborhood start at $630,000, while most cost at least $700,000. Studio apartments usually start at $130,000 but can go for much more.
Reply»Please know that we don't define a home at all; we use the National Association of Realtors median price for an existing single-family home. Also, as the area included in the calculation covers the entire metropolitan area (Miami-Dade, Broward and Palm Beach Counties) is it certainly likely that homes in the city proper or in your specific neighborhood will be higher, but that's not necessarily the case when you get further away from the center city.
Reply »Your definition of Boston extends to places 50 miles away. It's a small concentrated city. Difference between the center and even 20 miles out is sometimes 3 fold.
Reply»We don't define the metro areas used in our analysis; rather, we use the definitions as provided by the Office of Management and Budget.
Reply »So, Honolulu is the 46th most populous city in the United States, with a metropolitan area boasting a population of 955,000, and is the most expensive to purchase a home (median prices starting at over $650,000). Shouldn't they have been included in this article?
Reply»The current (July 2016) population estimate for the Urban Honolulu, HI Metropolitan Statistical Area from the Census Bureau sees the area ranked #54 in terms of population. Even though it is historically an expensive housing area, it misses the cut.
Reply »It's fine to say the median price of a home in NEW YORK CITY IS approximately $400,000, but in Manhattan the median price is well over a million and a $100,00 salary really won't cut it unless you bought property decades ago. One East Village building that sold for 2.5 million in the 1980s now has individual apartments for that price. This survey really doesn't tell it like it is.
Reply»The calculation includes the entire New York City metropolitan area, not just Manhattan or the five boroughs. Please check the "metro definitions" page for details.
Reply »Did you use median homes defined as single family or including condo and coop?
Reply»The data from the National Association of Realtors that we use in our calculation covers existing single-family homes only.
Reply »What about Honolulu? I'm sure the median home price and the salary needed would rank towards the top.
Reply»The National Association of Realtors reported that the Urban Honolulu metro area had a median home price of $760,200 in the third quarter of 2017. This would have fit in between San Diego and San Francisco, and using our methodology, a reckoning for the salary needed to buy a median-priced existing home there would be $135,800.56 The metro area is ranked #54 in terms of population. so it just missed our list of top 50.
Reply »Has there been talk of changing or modifying the 28/36 rule to better reflect the cost of living excluding housing and loans? At present this table uses a fixed 28% to get from PITI to Salary Needed regardless of where you are in the USA.The problem is the PITI now ranges from $821.46 for Pittsburgh to $5,044.23 for San Jose. A median home is 6.1 times more expensive in the San Jose metro area than the Pittsburgh metro area. However, other costs such as an automobile, food, and utilities (electricity, gas, water) are roughly the same for San Jose vs. Pittsburgh.Someone maxed out at 36% of gross income for home, auto, and credit cards loans would have $1,056.16 of extra spending money per month for life's essentials in Pittsburgh and $6,485.44 per month extra in San Jose. It's tough to live on $1,056.16 if you are paying for a kid in college or trying to set aside money for major repairs. You can live like a king if you have an extra $6,485.44 per month coming in.Thus, it seems the 28/36 rule needs to be more flexible. The main advantage for folks in San Jose is they could live like they are in Pittsburgh (spending under $1000/month) and to add $5,500 per month to savings. Building up an extra $66,000 of savings every year would be bad for the economy but allows the San Jose folks to call their own shots in life. Every month they would be saving up more than their PITI. The main downside is very few people have a $216,181.25/year or more minimum gross income needed to pass the 28/36 rule in San Jose.
Reply»The good news of sorts is that while we do calculations using traditional rules, market rules allow for "back-end" ratios that are commonly higher. The FHA allows for 41 percent total DTIs; Qualified Mortgage rules allow for 43%, and Fannie and Freddie are currently purchasing loans with total DTIs of up to 50 percent. While this may be more reflective of reality in some eyes, the truth is that carrying this much debt can put you at a greater risk of financial trouble, so adhering to a more conservative level of debt is likely to be safer and more sustainable over time.
Reply »Your property tax estimates for California do not appear to take in account Prop 13. Upon sale the property is reassessed to the purchase price. In my area of San Jose the actual tax rate is 1.3% $1194 parcel tax. Your $1,165,000 property tax bill would be approximately $16,340 or $1362 per month.
Reply»The tax data we use in our calculations comes from the Census Bureau as part of the American Community Survey. The figures we use are medians for the metro area.
Reply »You (appropriately) include property taxes, but do you also include state/local income taxes?If one state takes 5k in property taxes, and another takes 5k from you in income taxes, it has an equal effect on affordability.
Reply»The calculation for mortgage qualification performed by lenders is done using pre-tax income, so this is the calculation we employ. Income taxes and other costs (utilities, commuting, etc) are part of the cost of living, and certainly can affect one's level of financial comfort, but play no role in mortgage qualification.
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