Buying a new home is exciting, but it can be difficult to determine how much you can afford to spend, or, whether or not you can afford to buy at all. Through analyzing how much it would cost to pay a median-priced home’s mortgage principal, taxes, and insurance, the mortgage website HSH.com has determined how much a family would have to earn to afford to buy a home in many major US cities.
(Photo Credit: caswell_tom/Flickr)
Here are the figures for the five priciest cities:
Salary needed to buy: $145,361
Median home price: $744,400
Although San Francisco experienced the largest quarterly decline in the required salary, it remains the most expensive city for homeownership in the US.
Salary needed to buy: $101,683
Median home price: $517,800
The second most expensive metro area in California, and the country, is San Diego. Gains in home prices led to an increase in the salary needed for home buyers of almost $1600 this year.
Salary needed to buy: $96,514
Median home price: $481,900
Yet another California city falls in the top three most expensive metro areas for purchasing a home this year. Los Angeles saw a huge price increase last year and the largest quarterly gain of all of the 27 metro areas on the list.
Salary needed to buy: $92,271
Median home price: $410,800
New York City had the third-highest required-salary increase, with the impact of a 3.5 percent increase in prices counteracting a small decline in the average interest rate.
Salary needed to buy: $84,476
Median home price: $399,900
Boston rounds out the top five, although it remained stable in terms of affordability. A sharp decline in the required salary in the D.C. metro area pushed Boston higher on the list this year.
Click here to see the complete list, which covers 27 metro areas in total.
Contemplating a move for work? Here’s how to figure out how far your new salary will take you.
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In San Diego if you are going to spend your money on purchasing a home it should be a good one. The average home in San Diego is around $500,000 in a decent area. What’s the point in making $100,000 and not buying a decent home? Would not get a fixer upper in an “ok” area, when I have worked hard to get my salary. In fact even many fixer uppers in a tolerable area can be around $1,000,000. Depressing.… Read more »
I thought the rule of thumb was that you can afford a house that is 3 to 4 times your annual salary. The numbers in this article are greater than 5! I think it would be pushing it to buy a $500,000 house on a $100,000 salary! The payment and property tax would be about half your monthly salary after taxes!
Wow. These prices are much cheaper than Vancouver Canada. A median home here is around $8-900,000. Quite pricey. Maybe aove to LA isn’t so out of the question…
Cheers