Where Can You Really Afford to Buy a House?

Owning a home has long been associated with success, stability, and work ethic. An investment in your future, purchasing a home is one of your more significant financial decisions. It’s a decision nearly two out of every three Americans have made in recent years.

Interest rates, housing markets, community and school ratings, and crime statistics are only a few of the factors that may weigh into the decision to buy a home. This week, the 30-year fixed mortgage rate is 4.1 percent, and next week this rate will likely change.

While finding the right home that will earn you a decent return on your investment is essential, perhaps even more critical is the need to find a home you can afford. HSH recently published a report on the annual salary required to purchase a home in 27 different metropolitan areas. Based on this report and other supplemental data, let’s see where you can afford to buy at the median home price.

Annual income: $30,000-$40,000

If your annual earnings are at the lower end of this scale, you can afford a house at the median price in several major markets. This includes Cleveland, where the median home price is $102,100 and the monthly payment is around $695. You could also afford to buy in Pittsburg, St. Louis, or Cincinnati, as the price of a mid-level house in these areas ranges from $120,000 to $121,700. You’d be looking at a monthly payment of between $700 and $750. A three-bedroom, two-bathroom 2,065-square-foot Zillow listing from earlier this summer represents a typical Cincinnati home that is right around the median price at $117,500.

If your earnings are at the higher end of this scale, you can afford to live at the median in Atlanta or in Tampa, where mid-level housing prices are around $140,000 to $145,000.

$40,000-$50,000

At this income range, you can afford middle-range housing in Phoenix, Orlando, San Antonio, Minneapolis, Dallas, or Houston. Home prices in these areas range from $169,300 in San Antonio to $194,300 in Phoenix. As for monthly payment, a house in Phoenix may produce a mortgage payment of around $963 per month, while a Houston home, although lower priced, will produce a higher mortgage payment of around $1,144.

According to a Zillow listing, the median price in Houston may just get you a three-bedroom, two-bathroom home that has 2,004 square feet and an attached garage.

$50,000-$60,000

If you earn at this level, you earn right around the national median, and you can afford that same mid-level in Philadelphia, where homes at the midrange cost $201,800 (monthly payment of $1,179). If you earn at the higher end of this range, you could buy in Denver, where homes are priced at $288,400 (monthly payment $1,397). Other affordable  markets within this income range include Chicago, Baltimore, Sacramento, and Miami.

According to Zillow listings in Denver from this summer, the median price may very well buy you a two-bedroom, two-bathroom 991-square-foot apartment in a high-rise city complex, or it could buy you a quaint two-bedroom, one-bath home. This, of course, depends on your neighborhood preferences.

$60,000-$80,000

At the lower end of this range, you can afford the mid-level housing in Portland. With home prices of $271,900 and monthly payments estimated at $1,407, you need to earn roughly $60,308 to afford a middle-of-the-road Portland home.

If you’re closer to the $80,000 range, you can afford a home in Washington, D.C., or Boston, where mid-level homes are priced at $358,900 and $363,200, respectively. Based on Zillow listings in Washington, D.C., this could buy you a one-bedroom, one-bath condo, or a larger townhome. This, of course, depends on where exactly you want to be — closer to the burbs or where the action is.