Home affordability varies drastically depending on location
One thing new home buyers wonder is “How much income do I need to buy a home?”
The answer, as with everything in real estate is “it depends.”
Buying a home is quite affordable in some areas, requiring an income of less than $30,000 annually, assuming 20% down.
But in other places — like Seattle and San Francisco — you’ll need a six-figure income to afford the typical home.
The Mortgage Reports recently analyzed 12 large metros in the United States to see how median home prices differ, and what that means for down payments, mortgage payments and property taxes.
Do you make enough to buy a home in these cities?
Data and methodology text:
12. Philadelphia, Pa.
Median home price: $140,200Median real estate taxes: $1,694Down payment:
- 20%: $28,040
- 10%: $14,020
- 5%: $7,010
- 3.5%: $4,907
With 20% down, a homeowner could expect to pay about $722 per month including principal, interest, home insurance and property tax. A minimum qualifying income, using the 36% front-end ratio, is $24,071.
11. Phoenix, Ariz.
Median home price: $220,200
Median real estate taxes: $1,539
Down payment:
- 20%: $44,040
- 10%: $22,020
- 5%: $11,010
- 3.5%: $7,707
With 20% down, a homeowner could expect to pay about $1,041 per month including principal, interest, home insurance and property tax. A minimum qualifying income, using the 36% front-end ratio, is $34,691.
10. Chicago, Ill.
Median home price: $221,600
Median real estate taxes: $4,995
Down payment
- 20%: $44,320
- 10%: $22,160
- 5%: $11,080
- 3.5%: $7,756
With 20% down, a homeowner could expect to pay about $1,335 per month including principal, interest, home insurance and property tax. A minimum qualifying income, using the 36% front-end ratio, is $44,484.
9. Minneapolis, Minn.
Median home price: $238,400
Median real estate taxes: $3,328
Down payment
- 20%: $47,680
- 10%: $23,840
- 5%: $11,920
- 3.5%: $8,344
With 20% down, a homeowner could expect to pay about $1,265 per month including principal, interest, home insurance and property tax. A minimum qualifying income, using the 36% front-end ratio, is $42,174.
8. Miami, Fla.
Median home price: $308,000
Median real estate taxes: $2,600
Down payment
- 20%: $61,600
- 10%: $30,800
- 5%: $15,400
- 3.5%: $10,780
With 20% down, a homeowner could expect to pay about $1,493 per month including principal, interest, home insurance and property tax. A minimum qualifying income, using the 36% front-end ratio, is $49,766.
7. Austin, Texas
Median home price: $334,400
Median real estate taxes: $5,696
Down payment
- 20%: $66,880
- 10%:$33,440
- 5%: $16,720
- 3.5%: $11,704
With 20% down, a homeowner could expect to pay about $1,860 per month including principal, interest, home insurance and property tax. A minimum qualifying income, using the 36% front-end ratio, is $62,012.
6. Denver, Colo.
Median home price: $388,400
Median real estate taxes: $1,717
Down payment
- 20%: $77,680
- 10%: $38,840
- 5%: $19,420
- 3.5%: $13,594
With 20% down, a homeowner could expect to pay about $1,753 per month including principal, interest, home insurance and property tax. A minimum qualifying income, using the 36% front-end ratio, is $58,419.
5. Washington, DC
Median home price: $533,800
Median real estate taxes: $3,492
Down payment
- 20%: $106,760
- 10%: $53,380
- 5%: $26,690
- 3.5%: $18,683
With 20% down, a homeowner could expect to pay about $2,503 per month including principal, interest, home insurance and property tax. A minimum qualifying income, using the 36% front-end ratio, is $83,433.
4. Boston, Mass.
Median home price: $561,300
Median real estate taxes: $3,489
Down payment
- 20%: $112,260
- 10%: $56,130
- 5%: $28,065
- 3.5%: $19,646
With 20% down, a homeowner could expect to pay about $2,617 per month including principal, interest, home insurance and property tax. A minimum qualifying income, using the 36% front-end ratio, is $87,223.
3. New York, N.Y.
Median home price: $586,400
Median real estate taxes: $9,006
Down payment
- 20%: $117,280
- 10%: $58,640
- 5%: $29,320
- 3.5%: $20,524
With 20% down, a homeowner could expect to pay about $3,181 per month including principal, interest, home insurance and property tax. A minimum qualifying income, using the 36% front-end ratio, is $106,015.
2. Seattle, Wash.
Median home price: $697,700
Median real estate taxes: $4,411
Down payment
- 20%: $139,540
- 10%: $69,770
- 5%:$34,885
- 3.5%: $24,420
With 20% down, a homeowner could expect to pay about $3,259 per month including principal, interest, home insurance and property tax. A minimum qualifying income, using the 36% front-end ratio, is $108,625.
1. San Francisco, Calif.
Median home price: $1,249,000
Median real estate taxes: $7,615
Down payment rate
- 20%: $249,800
- 10%: $124,900
- 5%: $62,450
- 3.5%: $43,715
With 20% down, a homeowner could expect to pay about $5,810 per month including principal, interest, home insurance and property tax. A minimum qualifying income, using the 36% front-end ratio, is $193,675.
