Pittsburgh is more affordable, while four California cities are the most expensive
TRD
Homebuyers looking for an affordable mortgage should look to Steel City, not the Golden State.
A study by HSH.com sought to identify the most and least expensive metropolitan areas in the United States, based on mortgage payments for a median-priced home. HSH.com calculated the data using second-quarter data from the National Association of Realtors and mortgage rates from Freddie Mac and Fannie Mae.
Using a standard initial debt-to-income ratio of 28 percent and a 20 percent down payment, HSH.com found that Pittsburgh is the most affordable of the 50 largest metropolitan areas in the United States. To qualify for a mortgage to buy a $175,000 home, you would need a salary of $38,274, resulting in a monthly payment of just over $893.
Oklahoma City ranks second in affordability ($41,739 required income), followed by Cleveland ($44,089), Louisville ($44,314), and Memphis ($47,272). Rounding out the top 10 least expensive cities are Indianapolis, St. Louis, Buffalo, Birmingham, and Cincinnati. None of these cities require an income above $50,000 to afford a mortgage on a mid-priced home.
At the other end of the spectrum is California. San Jose ranked worst among the top 50 metropolitan areas, with a salary of $286,702 needed to support monthly mortgage payments of $6,689 on a median-priced home of $1.7 million. Homes are expensive there because supply is severely limited by local zoning, and high-earning buyers from tech companies compete for it.
California cities also occupy the next three spots on the most expensive list, with San Francisco in second place (requiring an income of $237,665), San Diego in third place ($147,434), and Los Angeles in fourth place ($130,920). In all three top cities, the 30-year fixed mortgage rate of 3.38 percent is higher than the national average.
The 10 most expensive metropolitan areas are rounded out by Seattle, Boston, New York (where a salary of $118,042 is needed to support payments of $2,754 on a $564,100 house), Denver, Washington, and Austin.
Miami and Chicago fall in the middle of the pack. In Miami, an income of $88,526 is required to make payments of $2,065 on a $485,000 house. In Chicago, an income of $74,628 is needed for payments of $1,741 on a $348,600 house.
In the United States, the median home price last quarter was $357,900. A salary of $68,032 would be needed to make the monthly payment of $1,587.
