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Salary Needed to Afford a Home in the Top 15 Metros

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Regional Builders

Salary Needed to Afford a Home in the Top 15 Metros


February 5, 2021
Philadelphia homes
Photo: Spiroview Inc.

Housing costs are the biggest expense Americans have, with about one-third of the average American salary going toward these. SmartAsset identified the salaries needed in the 15 largest metros to afford an average home payment and not exceed the recommended 36% debt-to-income ratio. The site compared median home values, property tax rates, down payment, homeowners insurance, and other debt payments to calculate these results. The metro where residents need to make the most and least are San Jose, Calif. and Philadelphia.

Key Findings
California is expensive. Three California cities – San Jose, Los Angeles and San Diego – are included in the 15 largest U.S. cities, and they all rank within the top four of this study, at first, third and fourth, respectively (with New York City claiming second place). Our findings show that living in California can be very costly if you want to own a home. The average salary (with no additional debt) needed to afford home payments across these three cities is $111,533.

Home prices vary by more than 5x. Homes in big cities are usually more expensive than homes in suburbs or small towns. But our study reveals that there is also a big difference among the 15 largest U.S. cities. The highest median home value on our list is higher than five times more expensive than the lowest. San Jose, California has a median home value of almost $1 million, while San Antonio, Texas has a median home value of just $171,100.

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