With nationwide interest rates on the rise, inventory at historic lows and home prices rising in Chicago, housing affordability has once again become a hot-button topic.
HSH.com took the National Association of Realtor’s third quarter data for media home prices and their third-quarter average interest rate for 30-year, fixed-rate mortgages to determine how much money homebuyers in 25 cities would need to earn in order to afford the principal and interest payment on the median-priced home in their market.
There is no doubt that your income will need to be much higher to cover taxes, insurances and other expenses to live in the home, plus any other debts you might have.
• Mortgage rate: 4.68 percent (+0.74 percent from 2Q13)
• Home price: $209,000 (+13.3 percent YOY)
• Monthly payment: $865.15
• Salary: $37,078.02
Though Chicago's stats are relatively affordable compared to other metro areas, they still represent a pretty big change from 2012, particularly in the salary required. In fact, if you waited from January to July to buy a median-priced home in Chicago, you would have had to make an additional $11,706.03. That's quite an increase.
As for other metro areas? You’d need to make 6 figures to afford a home in San Fransisco, the most expensive market at a salary of $125,071.78. The most affordable? Cleveland, where you'd need to earn $22,348.03. That's quite the difference.