If you’re going to San Francisco, be sure to make at least $153,000 a year — at least according to recent data.
Mortgage information website HSH.com recently released a list of salaries required to buy a home in the 27 largest metropolitan areas in the country. Of the cities, San Francisco was the priciest place to own a home, and Pittsburgh was the most affordable.
The survey uses the National Association of Realtors’ 2015 third-quarter data for median-home prices and HSH.com’s third-quarter average interest rate for 30-year, fixed rate mortgages to determine the salary needed to afford the principal, interest, taxes and insurance necessary to buy a home.
The figures are based on a 20-percent down payment. In cities like San Francisco, where the median-home price is $809,400, plunking down 20 percent ($161,880) might be a little steep. Buyers who opt for a 10 percent down payment will save money upfront, but will need to earn more to pay for the higher loan and the required private mortgage insurance. The survey lists the required salary for both 20-percent and 10-percent down payments.
The numbers reflect the median-home prices across entire metropolitan areas. For instance, northern New Jersey and Long Island are lumped into the New York metropolitan area, bringing the median-home price well below the average price in Manhattan or Brooklyn. The author stressed that these salaries are based on the housing debt one can reasonably afford, and do not take into account personal debts or other payments.
“Your salary is going to need to be a little bit higher than this to really handle all of life’s other expenses beyond just owning a home [such as] credit cards, student loans and car payments,” Tim Manni, HSH.com managing editor, told TODAY.
Here are the salaries you must earn to buy a home in the 27 most populous U.S. metropolitan areas — from the most expensive to the least.
1. San Francisco
The median-home price in the San Francisco metropolitan area is $809,400, slightly lower than in the second quarter. The salary required to afford a home there is $153,152.08.
2. San Diego
In the San Diego metro area, you need to make $106,695.94 a year to afford the median-home price of $554,400. Average monthly payments would total about $2,500.
3. Los Angeles
Home prices in Los Angeles area saw the highest quarterly change with a 13.84 percent increase. The required salary to buy a $506,800 home is $99,527.51.
Earning $92,796.90 a year in Beantown will afford you a home worth $449,000. The quarterly change in Boston (+8.3 percent) was the second highest on the list.
5. New York
The median-home price in the New York metro is $410,500, which requires a salary of $91,497.39. With a 10-percent down payment, the required salary increases to $105,763.
Between March and August, houses in the D.C. area became significantly more affordable. With a median-home price of $388,600, the required salary is $81,873.73.
A salary of $79,283.37 is necessary to afford a median-home price of $386,300 in Seattle, where housing prices are on the rise.
The Denver metro saw housing prices slacken between March and August. To buy a home worth $353,000, you would need to bring in $68,915.21 a year.
A salary of $66,507.55 is required to purchase a home in the Portland, Oregon, metro. The monthly payments for the property would be about $1,500.
The median-home price in the Miami metro is $290,000, which requires a salary of $64,112.23. With a 10 percent down payment, the required salary swells to more than $74,000.
11. Sacramento - $62,162.20
12. Chicago - $61,372.12
13. Baltimore - $56,083.99
14. Philadelphia - $55,338.66
15. Houston - $53,695.27
16. Dallas - $52,598.53
17. Minneapolis - $51,386.23
18. San Antonio - $48,470.87
19. Orlando - $47,302.80
20. Phoenix - $43,836.81
21. Tampa - $42,010.79
22. Atlanta - $39,393.11
23. Detroit - $38,332.76
24. St. Louis - $37,603.97
25. Cincinnati - $36,483.38
26. Cleveland - $34,402.31
27. Pittsburgh - $33,729.07