Unless you like the heat of Phoenix, buying a home in major metros on the West Coast requires one hefty salary.
Affordability, or lack thereof, continues to put a damper on the housing market in many major metros. HSH.com recently calculated the specific salary requirements in 27 metros throughout the nation based on median priced homes and mortgage rates.
Using data from the National Association of Realtors’ quarterly report for the second quarter of 2016, the national median home price was $240,700.
With a national 30-year fixed-rate mortgage of 3.73 percent, HSH says an annual salary of $52,699.17 is needed to purchase a home at that mark, leaving homebuyers to pay about $1,229 each month.
To determine the salary amount needed, HSH used its own second quarter average interest rates for a 30-year fixed-rate mortgage (which fell across the board in the second quarter of 2016) and measured considering a 20 percent standard down payment.
The base cost of owning and affording a home was based on the principal, interest, taxes and insurance.
According to the findings, the most affordable metros in the nation to buy a home are Pittsburgh, Cleveland and Cincinnati.
Unsurprisingly, the least affordable metros are in California: San Francisco, San Diego and Los Angeles ranked numbers one through three.
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In San Francisco, homebuyers need a salary of $161,947.60 to purchase a median priced home of $885,600 as of the second quarter of 2016, according to HSH. The 30-year fixed mortgage rate in the area is 3.77 percent, leaving homebuyers to consider a monthly payment of about $3,778.
Although still expensive, Los Angeles homebuyers are faced with a monthly payment of about $2,148 for a median priced home of $480,000 with a 20 percent down payment and a mortgage rate of 3.74 percent. The salary needed for L.A. homebuyers is $92,091.89.
Houston homebuyers need a salary of $52,274.68 to be able to afford a median priced home of $217,400 with a mortgage rate of 3.75 percent, HSH says. The monthly payment Houston residents should expect is $1,219.74.
Chicago residents have to make about $62,455 per year to afford a median priced home of $246,400, which was an increase of 18.12 percent over the first quarter of the year, according to NAR statistics. Homebuyers in Chicago will have a payment of around $1,457 each month toward their 3.72 percent mortgage.
Miami residents have to make just a bit more, requiring $65,120 per year to afford the median price of $310,000 for a home in the area. With a mortgage rate of 3.76 percent, Miami residents have to shell out $1,519.48 per year.
Washington D.C. and New York City both have the same reported mortgage rate of 3.70 percent, but homes are just a bit more pricey in D.C., where the median home as of the second quarter of 2016 was $406,900, compared with $395,400 in NYC.
However, New Yorkers will have to make a bit more to afford the monthly payment of $2,011.69, HSH says. NYC residents need a salary of $86,215.44 to afford a property. In Washington, D.C., the monthly payment is estimated at $1,911.94, and buyers will need to make $81,940.22.
