What Must You Earn to Buy a Home in Philadelphia?
How much salary do you need to earn to afford the principal and interest payments on a median-price home in your metro area?
To find out, HSH.com took the National Association of Realtors’ fourth-quarter data for median home prices and HSH.com’s fourth-quarter average interest rate for 30-year, fixed-rate mortgages to determine how much of your salary it would take to afford the base cost of owning a home — the principal and interest — in 25 metro areas.
They used standard 28 percent “front-end” debt ratios and a 20 percent down payment subtracted from the NAR’s median-home-price data to arrive at our figures. 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.
While the NAR continues to report strong year-over-year price growth, home prices and mortgage rates retreated from the third to fourth quarter in 2013. While homeowners continue to praise home-price growth as it adds to their equity positions, some homebuyers have actually been stymied by the rapid growth as home prices have been rising faster than incomes.
Here’s a look at what they had to say about Philadelphia.
Mortgage rate: 4.41 percent
- Quarterly change: -0.15 percent
Home price: $214,300
- Quarterly change: -7.47 percent
- YOY change: +2.1 percent
Monthly payment: $859.52
- Quarterly change: -$3,680.82
After three consecutive quarters of increases, home prices finally fell off in the final quarter of 2013. Likewise, the yearly gain in the City of Brotherly Love isn’t nearly as impressive as others, helping the salary requirement drop by more than $3,600.
Check out the complete list of What you must earn to buy a home in 25 cities in 2014. Original article written by Tim Manni of HSH.com.
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