- The income to purchase a home averages $116,000 across America, but varies by metro area
- In San Jose a salary of $361,000 is required, but it’s only $67,000 in Pittsburgh
- Scroll down for a table showing the required salary in the 50 largest metropolises
You don’t have to earn six figures to buy a house in America – as long as you know where to look.
Across America, the average income to buy a home in April was about $116,000, according to Realtor.com’s final report in prices in the 50 largest metropolises.
But in fourteen metro areas where prices are low, an income of less than $100,000 is enough to afford a house. Scroll down for a table showing the required salary in each of the 50 metros.
“Homeownership is possible if you don’t make six figures,” says Danielle Hale, chief economist at Realtor.com.
“In these areas, prices are so low that even with high mortgage rates, prices are not out of reach.”
The salary needed to buy a home in the 50 largest metro areas varies dramatically, according to a new report from Realtor.com. This card shows the top and bottom three
In Pittsburgh, potential homeowners earn only about $67,000 to afford the typical home in the area.
But buying a home in Pittsburgh isn’t without its challenges, warns Dawn Bierker, a local real estate agent with Re/Max 360 Realty. Each home receives multiple offers and first-time buyers are often outbid by investors.
‘Pittsburgh used to be very affordable’ Bierker told Realtor.com.
“But over the past five years we have seen a significant increase in property values. We also see that many investors are coming in and buying up real estate.’
On the other side is San Jose, where the average sales price is $1,467,000. To cover the huge mortgage payments, homebuyers need a salary of $361,000.
To calculate the salary needed to buy a home, Realtor.com looked at average home prices in the 50 largest metropolitan areas.
They assumed a 20 percent down payment, a mortgage interest rate of 6.99 percent and took into account local taxes and insurance rates.
The economists behind the analysis also ensured that the total cost of the mortgage and extras would not exceed 30 percent of the buyer’s earnings.
Meanwhile, a separate new report from the National Association of Realtors (NAR) revealed how a wealth of bargain hotspots are popping up across the country.
Unlike the Realtor.com report — which tied average local home prices to local income — the NAR report simply looked at how much prices rose or fell in different areas over the past year.
It found 15 cities where home values have fallen outright this year. Among them are neighborhoods in New York, Texas and Florida.
These areas are at odds with a national trend that has seen the average price of a single-family home increase 5 percent year-over-year to an average of $389,400.
At the same time, mortgage rates have risen above 7 percent, meaning buyers are paying more than $900 per month for a standard home than if they had purchased two years ago.
Above left is a house in Cleveland for sale for $195,000. Below left is an 1,898 square foot home in Pittsburgh for sale for $199,000. Above right you can see a $1.4 million house in Boston. Below right is a $1,488,000 home in San Jose
| metro area | Average offer price | Need income |
|---|---|---|
| Pittsburgh, Pa. | $250,000 | $67,000 |
| Detroit-Warren-Dearborn, Michigan. | $250,000 | $69,000 |
| Cleveland-Elyria, Ohio | $255,000 | $71,000 |
| Birmingham-Hoover, Ala. | $297,000 | $75,000 |
| Buffalo-Cheektowaga, NY | $285,000 | $79,000 |
| St. Louis, Mo.-Ill. | $294,000 | $82,000 |
| Indianapolis-Carmel-Anderson, Ind. | $340,000 | $87,000 |
| Louisville/Jefferson County, Ky.-Ind. | $327,000 | $87,000 |
| Rochester, NY | $295,000 | $87,000 |
| New Orleans-Metairie, La. | $335,000 | $90,000 |
| Baltimore-Columbia-Towson, MD. | $352,000 | $91,000 |
| Memphis, Tenn.-Miss.-Ark. | $339,000 | $91,000 |
| Oklahoma City, Oklahoma. | $330,000 | $98,000 |
| Cincinnati, Ohio-Ky.-Ind. | $375,000 | $99,000 |
| Philadelphia-Camden-Wilmington, Pa.-NJ-Del.-Md. | $370,000 | $100,000 |
| San Antonio-New Braunfels, Texas | $345,000 | $100,000 |
| Virginia Beach-Norfolk-Newport News, Va.-NC | $390,000 | $100,000 |
| Milwaukee-Waukesha, Wis. | $376,000 | $102,000 |
| Charlotte-Concord-Gastonia, NC-SC | $422,000 | $106,000 |
| Atlanta-Sandy Springs-Alpharetta, Georgia. | $415,000 | $108,000 |
| Columbus, OH | $397,000 | $108,000 |
| Jacksonville, FL. | $420,000 | $108,000 |
| Tampa-St. Petersburg-Clearwater, Florida. | $420,000 | $109,000 |
| Raleigh-Cary, NC | $451,000 | $113,000 |
| Las Vegas-Henderson-Paradise, Nev. | $475,000 | $114,000 |
| Richmond, Va. | $459,000 | $114,000 |
| Chicago-Naperville-Elgin, Ill.-Ind.-Wis. | $389,000 | $115,000 |
| Orlando-Kissimmee-Sanford, Florida. | $440,000 | $116,000 |
| Hartford-East Hartford-Middletown, Conn. | $406,000 | $118,000 |
| Houston-The Woodlands-Sugar Land, Texas | $370,000 | $118,000 |
| Kansas City, Mo.-Kan. | $422,000 | $119,000 |
| Minneapolis-St. Paul-Bloomington, Minnesota-Wis. | $449,000 | $122,000 |
| Phoenix-Mesa-Chandler, Ariz. | $537,000 | $132,000 |
| Providence-Warwick, RI-Mass. | $524,000 | $138,000 |
| Dallas-Fort Worth-Arlington, Texas | $450,000 | $139,000 |
| Nashville-Davidson-Murfreesboro-Franklin, Tennessee. | $573,000 | $142,000 |
| Riverside-San Bernardino-Ontario, California. | $600,000 | $152,000 |
| Miami-Fort Lauderdale-Pompano Beach, Florida. | $540,000 | $153,000 |
| Portland-Vancouver-Hillsboro, Ore.-Wash. | $615,000 | $156,000 |
| Austin-Round Rock-Georgetown, Texas | $557,000 | $157,000 |
| Washington-Arlington-Alexandria, DC-Va.-Md.-W. from. | $625,000 | $159,000 |
| Sacramento-Roseville-Folsom, California. | $650,000 | $162,000 |
| Denver-Aurora-Lakewood, Colorado. | $625,000 | $165,000 |
| Seattle-Tacoma-Bellevue, Washington. | $775,000 | $193,000 |
| New York-Newark-Jersey City, NY-NJ-Pa. | $769,000 | $218,000 |
| Boston-Cambridge-Newton, Massachusetts-NH | $870,000 | $226,000 |
| San Francisco-Oakland-Berkeley, California. | $1,027,000 | $256,000 |
| San Diego-Chula Vista-Carlsbad, California. | $1,050,000 | $259,000 |
| Los Angeles-Long Beach-Anaheim, California. | $1,192,000 | $298,000 |
| San Jose-Sunnyvale-Santa Clara, California. | $1,467,000 | $361,000 |