Do you earn enough to buy a home in your city?
How much income would it take to buy a median-priced in New York or Philadelphia? What about Chicago, Denver or San Francisco?
HSH.com crunched some numbers to determine how much money homebuyers in 25 major metro areas need to earn in order to purchase the median-priced home in each market. The median price is the halfway point for the market, meaning half the properties sold for less and half sold for more during the period we compared. The price amounts come from the National Association of Realtors quarterly survey of existing single-family home sales.
Here's what we found:
How did we come up with these figures?
To determine the salaries you see on the map above, we used the median home price for the area, and subtracted 20 percent as a common down payment. With this “loan amount,” we plugged HSH.com’s average interest rate for a thirty-year, fixed-rate mortgage into our Mortgage Calculator to determine a monthly payment for each area. From this figure, we used a 31 percent “front end” debt-to-income ratio* to calculate how much income was needed to qualify to buy the median-priced home. (Taxes and insurance were not considered in the calculation.)
How does your income stack up?
While you might be able to buy a luxury home in one market, you may only be able to purchase little more than a starter home in another. Should you consider moving to a less-expensive area, getting lots more home for the same income? If your income’s not quite enough to buy a median-priced (or higher) home in your market, don’t worry – there are lower priced homes within your grasp, but you’ll probably need to scour the market a little harder to uncover them. Find the best mortgage rates for your situation.
“Front end” debt-to-income ratio refers to the percentage of your monthly salary that your mortgage lender may use to go towards your mortgage payment. Lenders may use lower or higher ratios.
More help from HSH.com
Can I refinance an FHA second property through HARP?You should know that lenders are free to do their own "overlays" as to which programs and borrower criteria they will write loans for.
Advantages of a FHA mortgage in 2016FHA loans have become more affordable in 2015, thanks to a drop in the annual mortgage insurance premium that the Federal Housing Administration charges.
10 metros where a home costs about $1,000/monthHSH.com identifies 10 metro areas where you can afford the principal, interest, taxes and insurance payments on a median-priced home for only around $1,000 per month.
HSH.com on the latest move by the Federal ReserveThe Federal Reserve concluded a meeting today with no change to the federal funds rate and no changes to other monetary policy tools.
Mortgage Rates Radar 09/13/2016: Despite Fed concern, mortgage rates holding steadyHSH.com releases its latest Weekly Mortgage Rates Radar showing a slight increase in popular mortgage rates during the seven-day period ending September 13, as concerns that the Federal Reserve may make a move at next week's meeting have to buffeted the financial markets of late. The Weekly Mortgage Rates Radar reports the average rates and points offered by lenders for the two most popular types of mortgages, the conforming 30-year fixed-rate mortgage and the conforming 5/1 adjustable-rate mortgage (ARM).