U.S. cities where you need to earn over $200,000 to afford a home

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The cost of homeownership continues to weigh on all but the wealthiest buyers, and prospective homeowners now need to earn $200,000 or more in eight U.S. cities to afford a typical home, a new study finds.

Mortgage payments in the US have increased by an average of 45.6% over the past year. And with interest rates on 30-year fixed-rate mortgages hovering near 7%, homebuyers need to spend more to keep up with rising borrowing costs, according to a new analysis from real estate platform Redfin.

On average, a home buyer in the US needs to earn $107,281 to pay an average monthly mortgage payment of $2,682.

But the cost of homeownership also varies widely by market, with many cities requiring much more income to pay the monthly mortgage payments for a typical home. Of the 100 largest metropolitan areas in the US, these eight markets were the least affordable, based on income needs.

1. San Francisco

Median house price: $1,497,000

Income needed to afford a mid-price home: $402,821

2. San Jose, California

Median house price: $1,350,000

Income needed to afford a mid-price home: $363,265

3. Anaheim, California

Median house price: $945,000

Income needed to afford a mid-price home: $254,286

4. Oakland, California

Median house price: $920,000

Income needed to afford a mid-price home: $247,559

5.Los Angeles

Median house price: $823,500

Income needed to afford a mid-price home: $221,592

6.San Diego

Median house price: $790,000

Income needed to afford a mid-price home: $212,577

7. Oxnard, California

Median house price: $782,500

Income needed to afford a mid-price home: $210,559

8. Seattle

Median house price: $763,000

Income needed to afford a mid-price home: $205,312

With a chronic housing shortage and some of the wealthiest residents in the US, California contains many of the most expensive markets to buy a typical home, with seven requiring incomes of $200,000 or more.

New York City was not far behind the list, ranking 11th overall. To afford a mid-priced house in the Big Apple, you would need an income of $178,942 to keep up with the payments.

For the purposes of the study, mortgage payment affordability assumes that a given home buyer spends no more than 30% of their income on housing — a general rule of thumb for budgeting expenses.

Median house prices are based on Redfin sales data between October 2021 and October 2022, and median mortgage payments assume the buyer has made a 5% down payment. The mortgage rates are based on the average rates of October 2021 and October 2022, 3.1% and 6.9% respectively.

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The Valley Voice
The Valley Voicehttp://thevalleyvoice.org
Christopher Brito is a social media producer and trending writer for The Valley Voice, with a focus on sports and stories related to race and culture.

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