Monday
December 18, 2017

How Much You Should Earn to Buy a Home

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How Much You Should Earn to Buy a Home

How much money do you need to make in order to afford a home?

Using data from the National Association of REALTORS®, mortgage site HSH.com pinpointed the minimum salary required to pay for the principal loan amount, interest, taxes, and insurance payments on a median-priced home in some of the largest metro areas in the country.

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Nationwide, buyers would need to earn about $51,247 to afford a median-priced home of $217,300, assuming a 20 percent down payment and a 4.37 percent interest rate, according to HSH.com.

However, the minimum income needed to afford a home in specific areas can be much higher. Here are the five metros of the 27 HSH.com analyzed where buyers would need to have the highest salaries to afford a median-priced home there:

  1. San Francisco
    Salary needed: $145,351
    Median home price: $744,400
    Monthly payment (PITI): $3,392
  2. San Diego
    Salary needed: $101,683
    Median home price: $517,800
    Monthly payment (PITI): $2,373
  3. Los Angeles
    Salary needed: $96,514
    Median home price: $481,900
    Monthly payment (PITI): $2,252
  4. New York City
    Salary needed: $92,271
    Median home price: $410,800
    Monthly payment (PITI): $2,153
  5. Boston
    Salary needed: $84,476
    Median home price: $399,900
    Monthly payment (PITI): $1,971

On the other hand, these are the metros that would require the least amount of salary to purchase a median-priced home there:

  1. Pittsburgh
    Salary needed: $32,373
    Median home price: $136,700
    Monthly payment (PITI): $755
  2. Cleveland
    Salary needed: $33,909
    Median home price: $129,900
    Monthly payment (PITI): $791
  3. Tampa
    Salary needed: $35,732
    Median home price: $145,000
    Monthly payment (PITI): $834
  4. Cincinnati
    Salary needed: $35,765
    Median home price: $149,000
    Monthly payment (PITI): $835
  5. St. Louis
    Salary needed: $35,800
    Median home price: $150,200
    Monthly payment (PITI): $835

Source: “The Salary You Must Earn to Buy a Home in 27 Metros,” HSH.com (Dec. 1, 2014)