In the building industry, home prices tend to dominate the news, but they are only half of the equation: Knowing the salaries that people need to afford a home is also key to understanding the housing market and buyer demographics. SmartAsset rounded up the average salaries needed to afford home payments in the 15 largest U.S. cities, ranging from $27,453 to $184,442 a year. That last figure may make your head spin, but those are just the basic calculations. For those shouldering college debt or a loan for what you had hoped was a spark of business genius, you might want to hold onto something: Buyers with debt other than the mortgage will need to make $17,000 and $34,000 more a year to afford the monthly payments.
Affording home payments is a struggle many homeowners face, especially in a large city with high living costs. Questions of budgeting and saving come into play, as well as how much additional debt – from the likes of car loans and credit card bills – a homeowner can comfortably afford. To budget housing costs appropriately, it’s important to understand what your financial picture as a homeowner could look like from month to month. That’s why SmartAsset decided to examine how much you’d need to make in order to afford home payments in different cities across the country.
To find the salary needed to afford home payments, we looked at data for the 15 largest U.S. cities across five factors: median home value, property tax rate, down payment, homeowners insurance and other monthly debt payments. For details on our data sources and how we put all the information together to create our final rankings, check out the Data and Methodology section below.
This is SmartAsset’s third study on the salary needed to afford home payments in the 15 largest U.S. cities. Check out the 2019 version of the study here.