Despite encouraging signs within the housing sector, affordability remains a significant problem for prospective home buyers. This is making it increasingly difficult to own a home. “Affordability has fallen to a five-year low as home-price increases easily outpaced income growth,” Lawrence Yun, chief economist for the National Association of Realtors (NAR), said in a release.
With that being said, the recovery has impacted individual regions in their own way. Certain economic factors permit some regions to appreciate at a much faster rate while others have seen modest growth. On a national level, however, prices have increased substantially in 2013. According to CoreLogic, reports indicate that 23 states are within 10 percent of their home price peaks.
HSH Associates, a publisher of mortgage data, evaluated 25 major metros to see how much income home buyers need to earn in order to purchase a median-priced home and cover the principal and interest payment on the mortgage. The survey referenced the average price of a home, according to the NAR, and subtracted a 20 percent down payment. The research, however, does not account for taxes, mandatory insurance, or homeowner fees.
As properties continue to appreciate, how much salary does an individual need to earn in order to purchase a median-priced home in their respective city? The following illustrates the cities that require the highest and lowest salaries to purchase a median-priced home: