Nationally, a home buyer would need to earn a salary of $47,253.07 to afford the median-priced U.S. home, according to an updated ranking by HSH.com.
A down payment remains a big hurdle for many prospective home buyers. If you only put down 10 percent, instead of the standard 20 percent, that salary requirement nationally increases to $54,341.84 to cover the higher monthly payments.
It’s possible to buy a home with less than a 20 percent down payment. But when financing 90 percent of the property price, you would typically need Private Mortgage Insurance (PMI), which raises the income needed. In the national example above, a purchase of a median-priced home with only a 10 percent down payment (and including the cost of PMI) increases the income by just over $7,000 more.
HSH.com took the National Association of Realtors’ 2015 first-quarter data for median-home prices and HSH.com’s 2015 first-quarter average interest rate for 30-year, fixed-rate mortgages to determine how much of salary it takes to afford the base cost of owning a home — the principal, interest, taxes and insurance — in 27 metro areas.
San Francisco remains the most expensive metro area in terms of required salary. To afford the median-priced home in the San Francisco area, you will have to earn $141,417 a year. Cleveland is most affordable with a needed salary of $29,393 for purchasing a home.
See below for exactly how much salary you would need to earn in 27 metro areas: