Homeownership is now out of reach for buyers earning local median income and living in 44 of the country's 50 major cities, a new study found.
An April report from Clever Real Estate compared the income needed to afford a home and the actual income earned by the typical household in 50 metro areas and 48 states across the U.S. The report defines a home as "affordable" if it costs no more than 28% of a household's annual income.
The analysis found that, for those living in 44 of the country's 50 major cities, buyers would not be able to afford a median-priced home if they are earning the median income, even if they posted a 20% downpayment.
Where Is Homeownership Still Possible for Median-Income Earners?
Pittsburgh, Pennsylvania
In Pittsburg, the median home sells for $199,573. If a buyer posts a 20% down payment, the monthly mortgage payment would be $1,398 per month or $16,777 annually.
To afford the monthly mortgage without exceeding the 28% threshold, the buyer would need to earn $59,919 annually. The median household income in the city is $70,607.
Cleveland, Ohio
The median home in Cleveland sells for $182,652. With a 20% down payment, the mortgage payment would be equal to $15,786 annually. The buyer would need to earn $56,378 to afford the mortgage payments comfortably. The local median household income is $65,198.
St. Louis, Missouri
The median home sells for $225,674. A 20% down payment would bring the monthly mortgage cost to $1,557 or $18,688 annually. To afford the monthly payments without spending more than 28% of the household income, buyers must earn $66,743. The median income in St. Louis is $74,531.
Memphis, Tennessee
In Memphis, the median home sale price is $213,929. A buyer posting a 20% down payment would have monthly mortgage payments of $1,438, for a total of $17,264 annually. To comfortably afford this, they would need to earn $61,659. The local median income is $64,008.
Indianapolis, Indiana
The median home sale price in Indiana is $257,584. With a 20% down payment, this means buyers would have an annual mortgage of $20,552. A household would need to earn at least $73,398 to comfortably afford the monthly payments. The local median income is $75,824.
Birmingham, Alabama
The median home in Birmingham sells for $235,212. A 20% down payment would bring monthly mortgage payments to $1,521 for a total of $18,260 annually. A household must earn at least $65,216 to comfortably afford the payments. The local median household income is $67,242.
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