February 28th, 2014
Whether you’re a first-time homebuyer or a house-hunting veteran, you’ve likely heard all the talk about the changes in the housing market over the past year. Following the recession of 2008, homes across the country started to regain their value, and more buyers were out on the market. Because of this elevated demand, however, available homes were soon in short supply, and sellers were able to increase their asking prices.
But following all this movement in the market, how expensive is housing in the United States today? HSH.com recently released a report on “the salary you must earn” to buy a median-priced home in 25 U.S. cities. In particular, this is how much you’ll need to make to afford the principal and interest on the median mortgage in the area. Here are the results for the five most and least affordable metro areas on the list, plus how much HSH.com’s research determined you’d need to earn in yearly income after taxes:
Other report highlights
Along with determining salary, the HSH.com report also looked at a number of other figures in each area. One thing that was discovered that may be unexpected is that while San Francisco was the No. 1 least affordable metro area in the report, it actually had the lowest average 30-year fixed mortgage rate on the list, at 4.28 percent. Additionally, rates in this city had the greatest decline on a quarterly basis, at almost half a percentage point.
In comparison, Cleveland’s average rate for a 30-year mortgage was 4.43 percent, with only a 0.18 percent quarterly drop. Still, Cleveland has claimed the spot as the most affordable city on HSH.com’s list for a few years running.
Ready to buy?
While the HSH.com report can be used as a resource when house hunting, it should only be one of many. There’s no guarantee that if you move to a city on the list with the proposed salary, you’ll be all set to buy a home.
“There is no doubt that your income will need to be much higher, possibly even double or triple this level, to cover the needed taxes, insurances and other expenses to live in the home, plus the down payment and any other debts you might have,” HSH.com added. “Since those are highly variable, down to even the individual property level and personal choice, there is no adequate way to factor for them.”