You’ll need to earn more in San Francisco than throughout the rest of the country to afford a median-priced home, according to a quarterly report from HSH.com.
San Francisco topped HSH.com’s list of salaries needed in 27 metro areas to afford a median-priced home with a whopping income of $142,448 in the fourth quarter of 2014.
On the other end of the spectrum, Pittsburgh stayed the most affordable of the 27 metro areas, thanks to having the lowest mortgage rate at 3.98% and a decline in home prices. The required salary there stood at only $31,716 in the fourth quarter.
Only in Tampa, Fla., did the required salary to afford a home purchase rise from the third to fourth quarters in this case due to a sharp increase in home prices of 10.34%. Of all the cities HSH.com studied, salaries fell the most quarter-to-quarter in Los Angeles, this time by $7,000.
The biggest decline in home prices, meanwhile, occurred in Chicago, contributing to a nearly $5,000 drop from the third quarter in the needed salary. New York also witnessed a nearly $5,000 reduction in the required salary from the previous quarter, despite possessing the highest mortgage rate on the list at 4.22%.
HSH.com tracks the necessary salaries quarterly, basing them on the income needed to cover the principal and interest payments on a 30-year fixed-rate mortgage.
The study takes into account a standard 28% “front-end” debt ratio and 20% down payment subtracted from median home prices supplied by the National Association of Realtors. In calculating the salaries required, HSH.com used mortgage rate information for borrowers with good to excellent credit.