As a member of the local NWMLS, I have access to a variety of articles and reports including some like this one below. For people outside of WA, there is always a consideration that must be made with regard to affordability and even for people living here – how likely is it that a household will be able afford to purchase a home?
NWREporter January 2014
Seattle Buyers Need $63,145 in Earnings to Buy Median-Priced Home
Home buyers in Seattle need a salary of $63,145.41 to buy a median-priced home in the metro area. That compares to a salary of $22,348.03 needed to purchase the mid–priced home in Cleveland (the most affordable city on the list) and a whopping $125,071.78 to buy a home in San Francisco (the most expensive among 25 cities in a recent survey). Seattle area buyers will also pay the second highest mortgage rate among cities in the study.
Those findings were reported by HSH.com, which analyzed 25 major metropolitan areas to compile a list of after-tax income needed to buy a home in each city.
Tim Manni, managing editor of HSH.com and author of the site’s daily blog, said HSH used the National Association of Realtors’ 2013 third-quarter median home prices and its average interest rates for 30-year, fixed-rate mortgages in the quarter to calculate the principal and interest payment needed. Computations were based on median prices with a 20 percent down payment and assumed a standard 28 percent “front-end” debt ratio.
Comparison of Selected Metro Areas: Earnings Needed to Buy a Home (figures rounded)
| Metro Area |
Median Price of Home |
YOY Change in Price |
Mortgage Rate |
Monthly Payment |
Salary Needed |
| Cleveland |
$127,000 |
6% |
4.61% |
$521 |
$22,348 |
| Atlanta |
$152,300 |
41.8% |
4.63% |
$627 |
$26,863 |
| Orlando |
$167,800 |
29.3% |
4.64% |
$691 |
$26,631 |
| San Antonio |
$175,000 |
8.1% |
4.71% |
$727 |
$31,154 |
| Phoenix |
$191,700 |
25% |
4.55% |
$782 |
$33,498 |
| Chicago |
$209,000 |
13.3% |
4.68% |
$865 |
$37,078 |
| Sacramento |
$255,900 |
41.8% |
4.67% |
$1,058 |
$45,346 |
| Portland |
$276,200 |
15.5% |
4.71% |
1,147 |
$49,170 |
| Denver |
$286,900 |
10.2% |
4.64% |
1,182 |
$50,662 |
| Seattle |
$354,700 |
15.9% |
4.71% |
1,473 |
$63,145 |
| Boston |
$393,700 |
7.6% |
4.57% |
1,609 |
$68,956 |
| New York |
$405,400 |
3.4% |
4.60% |
$1,663 |
$71,255 |
| Los Angeles |
$448,900 |
26.2% |
4.63% |
$1,847 |
$79,177 |
| San Francisco |
$705,000 |
24.1% |
4.68% |
$2,918 |
$125,072 |
Source: HSH.com (from analysis of 25 metropolitan areas)
Manni acknowledged the calculations for salary needed to purchase the median priced home in each market as “basic, bottom-line” income needed to cover the mortgage. Realistically, income will need to be much higher, “possibly even double or triple the basic figure” to cover needed taxes, insurances and other expenses to live in the home, plus any other debts the prospective owner might have, he stated.
HSH.com® is the nation’s largest publisher of mortgage and consumer loan information. The firm, in business for 30 years, does not make or broker mortgages, but instead positions itself as an objective, independent source of information about consumer loans.
