Calculator

Can You Afford to Buy a Home?

Here’s what you need to earn in a year to get a mortgage for a median-priced home in the largest U.S. cities.

  • Dec. 31, 2020Updated 1:46 p.m. ET

In this pandemic economy, homes are scarce and competition for them is fierce, meaning prices are rising even as many Americans have less money to spend. How do you know if you can afford a home in a particular city? HSH.com’s quarterly report, which breaks down the annual income required to qualify for a mortgage in the country’s 50 largest metropolitan areas, is a good starting point.

Using 2020 third-quarter pricing data from the National Association of Realtors, and factoring in the industry standard 28 percent debt-to-income ratio to qualify prospective borrowers, the report determined the earnings required to qualify for a median-priced home in each area. (A 20 percent down payment and a fixed-rate, 30-year mortgage at current rates were assumed, and local property taxes and homeowner’s insurance costs were included.)

To buy a home at the national median price during Q3 2020 — $313,500 — a buyer needed an annual income of $60,770, according to the report. In Pittsburgh, where the median home was listed at $177,250, a buyer needed $38,266 of yearly earnings. Compare that with San Jose, Calif., where buying such a home required a hefty annual income of $243,303.

All 50 metro areas surveyed saw year-over-year increases in required income during Q3 2020; during the second quarter, that was the case in only six areas. This week’s chart shows what you’d need to earn in the 10 most affordable and 10 least affordable metros, and what your monthly payment would be in each.


#g-31calculator-what-you-need-to-earn-box ,
#g-31calculator-what-you-need-to-earn-box .g-artboard {
margin:0 auto;
}
#g-31calculator-what-you-need-to-earn-box p {
margin:0;
}
#g-31calculator-what-you-need-to-earn-box .g-aiAbs {
position:absolute;
}
#g-31calculator-what-you-need-to-earn-box .g-aiImg {
position:absolute;
top:0;
display:block;
width:100% !important;
}
#g-31calculator-what-you-need-to-earn-box .g-aiSymbol {
position: absolute;
box-sizing: border-box;
}
#g-31calculator-what-you-need-to-earn-box .g-aiPointText p { white-space: nowrap; }
#g-31calculator-what-you-need-to-earn-Artboard_1_copy {
position:relative;
overflow:hidden;
}
#g-31calculator-what-you-need-to-earn-Artboard_1_copy p {
font-family:nyt-franklin,arial,helvetica,sans-serif;
font-weight:300;
line-height:17px;
height:auto;
filter:alpha(opacity=100);
-ms-filter:progid:DXImageTransform.Microsoft.Alpha(Opacity=100);
opacity:1;
letter-spacing:0em;
font-size:14px;
text-align:left;
color:rgb(0,0,0);
top:1.1px;
position:static;
text-transform:none;
padding-bottom:0;
padding-top:0;
mix-blend-mode:normal;
font-style:normal;
}
#g-31calculator-what-you-need-to-earn-Artboard_1_copy .g-pstyle0 {
height:17px;
position:relative;
}
#g-31calculator-what-you-need-to-earn-Artboard_1_copy .g-pstyle1 {
font-weight:700;
line-height:19px;
height:19px;
font-size:16px;
color:rgb(30,138,67);
top:1.3px;
position:relative;
}
#g-31calculator-what-you-need-to-earn-Artboard_1_copy .g-pstyle2 {
font-weight:700;
line-height:21px;
height:21px;
font-size:16px;
top:1.3px;
position:relative;
}
#g-31calculator-what-you-need-to-earn-Artboard_1_copy .g-pstyle3 {
font-weight:700;
line-height:19px;
height:19px;
font-size:16px;
color:rgb(204,0,0);
top:1.3px;
position:relative;
}
#g-31calculator-what-you-need-to-earn-Artboard_1_copy .g-pstyle4 {
font-weight:700;
line-height:19px;
height:19px;
font-size:16px;
top:1.3px;
position:relative;
}
#g-31calculator-what-you-need-to-earn-Artboard_1_copy .g-cstyle0 {
color:rgb(204,0,0);
}
#g-31calculator-what-you-need-to-earn-Artboard_2_copy {
position:relative;
overflow:hidden;
}
#g-31calculator-what-you-need-to-earn-Artboard_2_copy p {
font-family:nyt-franklin,arial,helvetica,sans-serif;
font-weight:300;
line-height:17px;
height:auto;
filter:alpha(opacity=100);
-ms-filter:progid:DXImageTransform.Microsoft.Alpha(Opacity=100);
opacity:1;
letter-spacing:0em;
font-size:14px;
text-align:left;
color:rgb(0,0,0);
top:1.1px;
position:static;
text-transform:none;
padding-bottom:0;
padding-top:0;
mix-blend-mode:normal;
font-style:normal;
}
#g-31calculator-what-you-need-to-earn-Artboard_2_copy .g-pstyle0 {
height:17px;
position:relative;
}
#g-31calculator-what-you-need-to-earn-Artboard_2_copy .g-pstyle1 {
font-weight:700;
line-height:19px;
height:19px;
font-size:16px;
color:rgb(204,0,0);
top:1.3px;
position:relative;
}
#g-31calculator-what-you-need-to-earn-Artboard_2_copy .g-pstyle2 {
font-weight:700;
line-height:21px;
height:21px;
font-size:16px;
top:1.3px;
position:relative;
}
#g-31calculator-what-you-need-to-earn-Artboard_2_copy .g-pstyle3 {
font-weight:700;
line-height:19px;
height:19px;
font-size:16px;
top:1.3px;
position:relative;
}
#g-31calculator-what-you-need-to-earn-Artboard_2_copy .g-pstyle4 {
font-weight:700;
line-height:19px;
height:19px;
font-size:16px;
color:rgb(30,138,67);
top:1.3px;
position:relative;
}
#g-31calculator-what-you-need-to-earn-Artboard_2_copy .g-cstyle0 {
color:rgb(204,0,0);
}

METROPOLITAN AREAS WITH THE LOWEST

REQUIRED INCOME FOR MORTGAGES

METROPOLITAN AREAS WITH THE HIGHEST

REQUIRED INCOME FOR MORTGAGES

$46,055

Buffalo

$243,303

San Jose, Calif.

$1,075

Monthly payment: $5,677

$45,558

Birmingham, Ala.

$199,465

San Francisco

$1,063

$4,654

$45,040

St. Louis

$124,824

San Diego

$1,051

$2,913

$44,388

Cincinnati

$122,112

Los Angeles

$1,036

$2,849

$44,183

Memphis

$110,943

Boston

$1,031

$2,589

$43,688

Indianapolis

$108,357

Seattle

$1,019

$2,528

$42,129

Louisville, Ky.

$103,911

New York

$983

$2,425

$41,210

Cleveland

$91,548

Washington

$962

$2,136

$39,567

Oklahoma City

$86,950

Denver

$923

$2,029

$38,266

Pittsburgh

$83,189

Portland, Ore.

$893

$1,941

METROPOLITAN AREAS WITH THE HIGHEST

REQUIRED INCOME FOR MORTGAGES

$243,303

San Jose, Calif.

Monthly payment: $5,677

$199,465

San Francisco

$4,654

$124,824

San Diego

$2,913

$122,112

Los Angeles

$2,849

$110,943

Boston

$2,589

$108,357

Seattle

$2,528

$103,911

New York

$2,425

$91,548

Washington

$2,136

$86,950

Denver

$2,029

$83,189

Portland, Ore.

$1,941

METROPOLITAN AREAS WITH THE LOWEST

REQUIRED INCOME FOR MORTGAGES

$46,055

Buffalo

$1,075

$45,558

Birmingham, Ala.

$1,063

$45,040

St. Louis

$1,051

$44,388

Cincinnati

$1,036

$44,183

Memphis

$1,031

$43,688

Indianapolis

$1,019

$42,129

Louisville, Ky.

$983

$41,210

Cleveland

$962

$39,567

Oklahoma City

$923

$38,266

Pittsburgh

$893

Source: HSH.com

By The New York Times

Be mindful that other home expenses, such as utilities, maintenance and repairs, are not included in these monthly payments amounts. And while list prices were used to determine the figures in the chart, bidding wars can push final sale prices — and your payments — higher than what’s shown.

For weekly email updates on residential real estate news, sign up here. Follow us on Twitter: @nytrealestate.

All your Asset management needs with Global Asset Management Korea Magazine

This post was originally published on this site

Share.

Comments are closed.