Home affordability took a turn for the better in the fourth quarter. Among the biggest cities, homeowners in the most expensive metropolitan area need to earn nearly $100,000 more than borrowers in the least expensive area.
In Cleveland, a homeowner needs an annual salary of just $19,435 in order to afford the a median-priced home in the area — the lowest of any of the 25 biggest metropolitan areas.
The value was determined from the National Association of Realtors’ fourth-quarter data for median home prices, while the salary needed was based on average 30-year fixed mortgage rates.
At the other end of the scale was San Francisco. Someone looking to buy a home in the City by the Bay would need to earn $115,510.
The findings were discussed in a report issued Tuesday by HSH.com.
The average salaries were based on principal and interest payments and excluded property taxes, insurance and other expenses.
“In the most recent update of the study, using data from the fourth quarter of 2013, HSH.com found that affordability has increased significantly since the third quarter of 2013 as home prices and mortgage rates have fallen,” the report said.
Behind San Francisco was San Diego, where a buyer would need a salary of $81,570 to afford a median-priced home.
Los Angeles followed with a required salary of 72,127, then $66,167 in New York and $63,673 in Boston.
Cleveland was joined by Cincinnati, St. Louis, Atlanta and Tampa, Fla., as metropolitan areas where the required salary to purchase a median-priced home was less than $25,000.
