Here’s What You Need To Earn To Own A Home In 50 American Cities
Once a fundamental part of the American dream, the ability to own a home is drifting farther and farther away for many Americans.
But, as Visual Capitalist’s Pallavi Rao details below, between skyrocketing prices, stagnating wages, and now rising interest rates, the deck seems to be increasingly stacked against home ownership.
Using May 2023 data tabulated by Home Sweet Home, we map out the annual salary needed to afford a 30-year mortgage (at 6.37%) to buy a home in America’s 50 most populous metropolitan areas.
The monthly minimum mortgage payment includes taxes and insurance as well, and is capped at roughly one-third of the income. This analysis also assumes that the homeowner will put down a 20% down payment.
The Least and Most Affordable American Cities to Own a Home
At the top of the list, and at the very west of the country, San Jose is the least affordable city to own a home for the average American.
One would have to earn at least $374,000 a year to afford a $1.6 million dollar home in the city.
To put those numbers into perspective, the median American annual income is $75,000, about one-fifth what’s required to buy a home in San Jose.
Here’s a look at the annual earnings needed to afford a home in all 50 largest cities in the U.S., ranked from least to most affordable.
Rank
Metro Area
State
Median Home Price
Annual Salary
1
San Jose
California
$1,618,400
$373,696
2
San Francisco
California
$1,192,600
$282,167
3
San Diego
California
$880,000
$209,110
4
Los Angeles
California
$746,800
$181,106
5
Seattle
Washington
$699,300
$170,340
6
Boston
Massachusetts
$644,400
$165,239
7
New York City
New York
$577,300
$160,233
8
Denver
Colorado
$636,100
$150,622
9
Washington, D.C.
N/A
$557,200
$139,911
10
Miami
Florida
$560,000
$137,574
11
Portland
Oregon
$556,800
$136,147
12
Riverside/San
Bernardino
California
$550,000
$133,607
13
Austin
Texas
$467,900
$128,995
14
Sacramento
California
$500,000
$125,304
15
Salt Lake City
Utah
$522,700
$122,717
16
Providence
Rhode Island
$417,000
$112,281
17
Orlando
Florida
$419,900
$104,772
18
Dallas
Texas
$372,400
$103,460
19
Phoenix
Arizona
$439,700
$103,112
20
Raleigh
North Carolina
$420,000
$102,572
21
Las Vegas
Nevada
$431,400
$101,310
22
Tampa
Florida
$390,000
$97,387
23
Minneapolis
Michigan
$361,500
$94,466
24
Hartford
Connecticut
$314,900
$93,861
25
Charlotte
North Carolina
$387,200
$93,735
26
Jacksonville
Florida
$370,000
$93,422
27
Baltimore
Maryland
$357,800
$93,378
28
Nashville
Tennessee
$385,800
$93,168
29
Chicago
Illinois
$321,000
$92,868
30
Houston
Texas
$327,000
$91,826
31
Milwaukee
Wisconsin
$339,600
$89,752
32
Atlanta
Georgia
$354,300
$89,198
33
Richmond
Virginia
$362,300
$88,769
34
San Antonio
Texas
$320,500
$88,683
35
Philadelphia
Pennsylvania
$315,300
$87,293
36
Virginia Beach
Virginia
$313,200
$79,336
37
Kansas City
Missouri
$291,000
$76,147
38
Columbus
Ohio
$284,700
$76,133
39
Indianapolis
Indiana
$289,300
$71,409
40
New Orleans
Louisiana
$265,200
$68,946
41
Memphis
Tennessee
$268,600
$68,005
42
Birmingham
Alabama
$276,500
$67,773
43
Cincinnati
Ohio
$252,200
$66,260
44
Buffalo
New York
$206,800
$63,386
45
St Louis
Missouri
$231,100
$63,260
46
Detroit
Michigan
$227,000
$62,758
47
Louisville
Kentucky
$246,000
$62,741
48
Oklahoma City
Oklahoma
$227,300
$62,161
49
Cleveland
Ohio
$191,400
$55,515
50
Pittsburgh
Pennsylvania
$175,000
$50,316
National
$371,200
$97,204
Other Californian cities, San Francisco (ranked 2nd), San Diego (3rd), and Los Angeles (4th) all require an annual income of at least $180,000 to attempt home ownership within their metropolitan boundaries.
Boston (ranked 6th) and New York (ranked 7th) represent unaffordability on the East Coast, both requiring at least $160,000 a year to buy homes there.
It’s not just the coasts that are expensive however. To buy a home in Denver (ranked 8th) and Salt Lake City (15th) means earning more than $120,000 a year.
However, cities in the Midwest and South, like Pittsburgh, Detroit, Oklahoma City, and Louisville, are far more affordable, requiring less than $63,000 a year to buy a home.
Interest Rates Rock Home Ownership Chances
Aside from the obvious price differences in housing markets, a key factor that has elevated income requirements across the board is the rapid rise in interest rates in the last year. In fact the average 30-year mortgage has pushed past 7%, the highest it’s been since the 2000s.
This means that while the median price of a house in San Jose has actually come down between 2022 and 2023, the minimum monthly payment has increased from $7,717 to $8,720 this year.
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So to afford a median-priced home in the country, an American needs to earn closer to $100,000 a year, up from $75,500 in 2022. And even then, they would be priced out of owning a home in nearly half of the 50 largest cities in the country.
As a result Americans may yet further delay home ownership. Renting is now a far more attractive option, thanks to the biggest difference between rent and mortgages in over 50 years.
Tyler Durden
Mon, 10/23/2023 – 19:20
https://www.zerohedge.com/personal-finance/heres-what-you-need-earn-own-home-50-american-cities



