March 9, 201511 yr Map: The salary you need to buy a home in 27 U.S. cities - The Washington Post From the article: "HSH.com, a mortgage research site, has estimated how much salary you need to earn to afford the principal, interest, taxes and insurance payments on a median-priced home in 27 metro areas.On a national scale, a buyer who puts 20 percent down would need to earn a salary of $48,604 to afford the median-priced home in America. But that total varies a lot from city to city. Pittsburgh, Cleveland, St. Louis and Cincinnati rank as the most affordable metros in which to buy a new home – HSH.com estimates that you can buy the median home while making less than $34,000 – while New York, Los Angeles and San Diego are at the high end, requiring salaries of nearly $90,000 or more. But the most expensive city by far is San Francisco, where the site estimates you would need to make $142,448 to buy the median home in the area."
March 9, 201511 yr Chicago is 62% higher than Cincinnati. I've got a good friend who works from home in Greater Cincinnati for a Chicago company. They pay him on a Chicago pay scale. If they're basing their pay scale on cost of living...that's DEFINITELY saying something about the kind of money my buddy is making.
March 9, 201511 yr The site's calculations assume that a buyer spends 28 percent of their gross monthly income on housing, including principal, interest, taxes and insurance, (in line with industry guidelines for standard "front-end" debt ratios) and makes a 20 percent down payment on a house. The salary required to purchase a home in Cincinnati is $33,485. How many people earning $33,485 will be able to put 20% down on a house? I'd guess very few, if any.
March 9, 201511 yr The site's calculations assume that a buyer spends 28 percent of their gross monthly income on housing, including principal, interest, taxes and insurance, (in line with industry guidelines for standard "front-end" debt ratios) and makes a 20 percent down payment on a house. The salary required to purchase a home in Cincinnati is $33,485. How many people earning $33,485 will be able to put 20% down on a house? I'd guess very few, if any. If my math is correct, a 20% down payment on a $138,000 house is $27,600... So basically you'd have to have a years salary as a down payment. Yeah, not happening.
March 9, 201511 yr The site's calculations assume that a buyer spends 28 percent of their gross monthly income on housing, including principal, interest, taxes and insurance, (in line with industry guidelines for standard "front-end" debt ratios) and makes a 20 percent down payment on a house. The salary required to purchase a home in Cincinnati is $33,485. How many people earning $33,485 will be able to put 20% down on a house? I'd guess very few, if any. If my math is correct, a 20% down payment on a $138,000 house is $27,600... So basically you'd have to have a years salary as a down payment. Yeah, not happening. Thats part of the issue, they should have that money saved regarless, biggest problem with todays society is they spend to much, not enough saved.
March 9, 201511 yr Thats part of the issue, they should have that money saved regarless, biggest problem with todays society is they spend to much, not enough saved. Realistically how much money can you save if you're earning $33,485 per year?
March 9, 201511 yr Realistically how much money can you save if you're earning $33,485 per year? Not happening. This is the 21st century and unless one of you is a doctor, you need two incomes to buy a home in any part of a city that isn't in a demilitarized zone.
March 9, 201511 yr In the lower half of the current real estate market in NKY, less than 10% in transactions have 20% down payments. Houses that can go FHA financing with 0% to 3.5% down are in very high demand and make up the majority of the market.
March 9, 201511 yr Thats part of the issue, they should have that money saved regarless, biggest problem with todays society is they spend to much, not enough saved. Agreed that it is part of the issue. 76% of Americans are living paycheck-to-paycheck - Jun. 24, 2013
March 9, 201511 yr Realistically how much money can you save if you're earning $33,485 per year? Should be able to save 5k easy per year at a minimum.
March 9, 201511 yr Has anyone seen an affordability index for housing lately? I'm wondering how it stacks up vs historical rates. I am really surprised at the Cincinnati number as I would have expected that to be higher. An old rule of thumb was the home price should not exceed 2.5 times your annual salary but I have no idea how that's changed with the rates, housing costs and wages.
March 9, 201511 yr Thats part of the issue, they should have that money saved regarless, biggest problem with todays society is they spend to much, not enough saved. How many people do you think have $27k in their savings account?
March 9, 201511 yr Should be able to save 5k easy per year at a minimum. Perhaps. If they're saving $5K per year, it will still take 5 years to accumulate enough money to put 20% down on a modest $125,000 home.
March 9, 201511 yr Should be able to save 5k easy per year at a minimum. I was thinking more along the lines of $3,350 per year or 10%. Not easy by any stretch, but very realistic.
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