We all have an idea of what our dream home is gonna be like, at least in our head. But, did it ever hit home (so to speak) on you, how much would it actually take to making that dream into a reality?
HSH.com, a mortgage online resource since 1979, came up with a guide to give us a ballpark figure of the salary one needs to make in order to afford buying a decent median house in each of the 27 metros. This is a good point of comparison with our paycheck for us to have a clue if we are, indeed, financially ready to make that all-important transition between renting and owning; and somehow, still, make the two ends meet, at the end of the day.
San Francisco real estate market would require the most from you with an annual salary demand of $142,448.33. This is roughly five times compared to that of the two cheapest markets, Pittsburgh ($31,716.32) and Cleveland ($32,010.41); and almost triple the amount of the average national salary which stands at $48,603.82.
San Diego and Los Angeles, two other major cities in California, are on the heels of top-ranked San Francisco with a salary demand of $95,432.68 and $89,664.86, respectively. Boston, Washington, and New York areas don't offer affordable homes, as well.
If you aren't making much, you might consider moving to areas such as St. Louis, Cincinnati, Detroit, and Atlanta where there is a good chance of you owning a home.
In their analysis of the 27 metros, HSH.com weighed in the data for home prices from the National Association of Realtors, and their very own average interest rate for fixed-rate loans in a span of 30 years.
They also made use of a 20 percent downpayment and the assumption that people allocate 28 percent of their income to housing loans based on the standard "front end" debt ratios. HSH also accounted for property taxes and insurance costs.
There would be an increase in the amount of salary needed when factored in with just a 10 percent down payment. The national average salary, for instance, would surge to $56,140.44 with more than $7,000 in discrepancy.
Of course, we should still take things with a little grain of salt. HSH does not offer a "hard and fast" guide as the estimates could vary in actual situations.
