As home prices and interest rates continue to rise, prospective homebuyers in the U.S. require an annual salary of $114,627 to afford a median-priced house, according to a recent report by Redfin. In the top 10 most expensive metro areas, the required income is more than $200,000, with the priciest two metros demanding incomes exceeding $400,000. San Francisco and San Jose, Calif., top the list with salaries of $404,332 and $402,287, respectively, CNBC reports.
While Manhattan is the most costly U.S. city, the New York metro area as a whole ranks ninth due to buyers flocking to more affordable outlying areas. But even in those “cost-friendly” havens, buyers must earn about $197,734 to afford a home.
Earning a high salary isn’t enough in some competitive markets. Buyers may find themselves competing against veteran homeowners who can make cash offers.
Some homebuyers are using their home equity to buy new homes in lower-priced areas instead of financing, to avoid an 8% mortgage rate, said [Daryl] Fairweather.
“That might be driving prices up and affordability down,” she said.
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