You can buy a median-priced home in Pittsburgh living on a household salary of $32,390 if you put 20 percent down. You’d need five times that to afford a median-priced home in San Francisco, according to HSH.com, a housing market research firm.
The extremes are not too surprising, The least affordable metro regions for home buyers are all in California — San Diego and Los Angeles are the next most expensive towns after San Francisco.
But buying a home is becoming more difficult in most metro areas. That’s because home values are on the rise, which is a good sign for the economy, but a drag if you’re looking for a bargain. At the same time, while prices went higher in the second quarter of 2016 over the first quarter, mortgage rates dropped across the country, making it easier to afford more home.
HSH did a comparison to determine how much salary you need to buy a home in 27 metro areas. Pittsburgh came in lowest, with a median-priced home at $140,500 — though prices went up from first quarter to second quarter this year. That’s true also in Pittsburgh rival city, Cleveland, which is the second most affordable city despite increases in prices of 24 percent. For Cleveland, buyers need $34,434 annually to buy a home priced at $138,100 with 20 percent down. Cincinnati ranked third with a 17 percent hike in home prices and an average home price of $160,600. A household salary would need to be $37,179 to get a home in Cincinnatti with 20 percent down.
If you’re looking to move to a city that just became more affordable — in other words, home prices dropped — check Florida. Orlando, Tampa, and Miami are the only three cities where prices went down.
The national average salary needed to buy a home is $52,699.17, which is about what it costs to afford a median-priced home in Houston. If you want to buy a home in San Francisco, you need a $161,947.60 salary in order to afford a median-priced home of $885,600.
Of course, putting 20 percent down makes buying a home easier, but the International Center on Housing Risk notes that few first-time home buyers do. In June, 72 percent of first-time home buyers put a down payment of 5 percent or less, and 22 percent of first-time buyers had subprime credit (a score below 660), which means they’re not getting the best mortgage rate out there. It’s clear that avoiding a housing crisis means not stretching the dollar too far.
Trying to find a bargain? Here’s a list of the metro areas HSH reviewed. HSH also produced a great interactive display so buyers can look through cities to see quarterly changes and decide where they might like to move.
