Most and least affordable cities for home buyers
Although home prices have risen sharply over the past year in most major metropolitan areas, low interest rates have kept homes affordable in 17 of 27 major metropolitan areas. Indeed, in six cities, the average monthly payment costs less than $1,000 for those with a 20 percent down payment.
However, the affordability picture is far less rosy if you happen to live on the Western or Eastern seaboards. Residents of Seattle, Portland, San Francisco, Los Angeles, San Diego, New York City, Boston and Miami all earn far less, on average, than what’s needed to buy the median-priced home, according to an analysis by HSH Associates.
Pulling together median home prices and average mortgage rates, HSH found that the average salary Americans would need to buy a home is just $51,986 on a national basis. That’s nicely below the $55,775 that the Census Bureau reported the average American household took home in 2015. However, averages mask vast variations in affordability, based on regional differences in income, interest rates and housing prices.
For instance, where the average Minnesota resident earns an above-average $63,488, according to the Census Bureau, both home prices and interest rates skew on the low side, making home affordability a relative breeze in Minneapolis.
Miami residents grapple with the opposite situation: Interest rates and housing prices skew on the high side, while the average Florida resident takes home just $49,426 -- some $6,349 less than the national average.
In which cities are homes most and least affordable, based on median home prices, the average rate for a 30-year, fixed-rate mortgage and average incomes in that state? Here are the six most affordable and six least affordable major metropolitan areas.
Six most-affordable cities:
Pittsburgh
Median home price: $140,000 (vs. the $240,900 national average)
Average mortgage rate: 3.49 percent (vs. a 3.57 percent national average)
Monthly payment: $745.49
Income necessary to afford the median-priced home: $31,962.
Average income in Pennsylvania: $55,702.
Cleveland
Median home price: $138,900
Average mortgage rate: 3.58 percent
Monthly payment: $797.64
Income necessary to afford the median-priced home: $34,185
Average income in Ohio: $51,075
Cincinnati
Median home price: $157,000
Average mortgage rate: 3.63 percent
Monthly payment: $842.74
Income necessary to afford the median-priced home: $36,117
Average income in Ohio: $51,075
St. Louis
Median home price: $170,000
Average mortgage rate: 3.53 percent
Monthly payment: $875.62
Income necessary to afford the median-priced home: $37,527
Average income in Missouri: $50,238
Detroit
Median home price: $170,817
Average mortgage rate: 3.61 percent
Monthly payment: $910.78
Income necessary to afford the median-priced home: $39,033
Average income in Michigan: $51,084
Atlanta
Median home price: $191,500
Average mortgage rate: 3.54 percent
Monthly payment: $918.98
Income necessary to afford the median-priced home: $39,385
Average income in Georgia: $51,244
Least affordable cities:
San Francisco
Median home price: $835,400
Average mortgage rate: 3.66 percent
Monthly payment: $3,550.71
Income necessary to afford the median-priced home: $152,173
Average income in California: $64,500
San Diego
Median home price: $589,300
Average mortgage rate: 3.78 percent
Monthly payment: $2,535.26
Income necessary to afford the median-priced home: $108,654
Average income in California: $64,500
Los Angeles
Median home price: $536,700
Average mortgage rate: 3.65 percent
Monthly payment: $2,336.77
Income necessary to afford the median-priced home: $100,147
Average income in California: $64,500
Boston
Median home price: $435,300
Average mortgage rate: 3.50 percent
Monthly payment: $2,007.92
Income necessary to afford the median-priced home: $86,054
Average income in Massachusetts: $70,628
New York City
Median home price: $397,600
Average mortgage rate: 3.56 percent
Monthly payment: $1,994.72
Income necessary to afford the median-priced home: $85,488
Average income in New York: $60,850
Seattle
Median home price: $422,100
Average mortgage rate: 3.76 percent
Monthly payment: $1,908.06
Income necessary to afford the median-priced home: $81,774
Average income in Washington: $64,129
