US home prices increased 3.5% in October 2023 nationally on an annual basis as the number of homes for sale declined by 10.9% while the number of homes sold decreased by 9.43% during this period; however, there are still many states where a person needs to earn more than $200,000 to buy a home.
According to NAR’s quarterly study, a household in the San Jose region would need to make $482,835 in order to qualify for a median-priced single-family home. This is the highest income requirement out of all 221 US metro markets evaluated.
The qualifying income required to purchase a home in each metro area was calculated by the research using a 20% down payment and a 7.12% interest rate. A household’s monthly principal and interest payment cannot exceed 25% of their income.
Large metropolitan coastal centres with relatively costly residences are the cities with the greatest income requirements, which may come as no surprise. California has some of the highest property prices in the nation since the state’s real estate is both in great demand and hard to come by.
These are the 11 metro regions where a household must earn more than $200,000 in order to purchase a property at the median price.
San Jose-Sunnyvale-Santa Clara, California: $482,835
Anaheim-Santa Ana-Irvine, California: $340,595
San Francisco-Oakland-Hayward, California: $339,290
Honolulu, Hawaii: $277,147
San Diego-Carlsbad, California: $255,381
Salinas, California: $246,716
Oxnard-Thousand Oaks-Ventura, California: $240,504
Los Angeles-Long Beach-Glendale, California: $234,266
San Luis Obispo-Paso Robles, California: $232,257
Boulder, Colorado: $223,879
Naples-Immokalee-Marco Island, Florida: $200,964
Decatur, Illinois, the least costly of the 221 US metro regions in the survey, has significantly more reasonably priced properties than the priciest neighbourhoods. Buyers in that city only require a household income of $33,459 in order to purchase a property.
In a similar vein, housing costs in rural and smaller Rust Belt cities are far lower than in many Californian metropolises. Less than $50,000 is the qualifying income for a house in Youngstown, Ohio; Charleston, West Virginia; and Erie, Pennsylvania.