Becoming a homeowner is a luxury in some cities in the United States. Being an average salary earner isn’t enough in some expensive cities like San Jose, San Francisco, San Diego, and Los Angeles among others.
For instance, you need to earn at least $330,758.29 annually as salary in San Jose to be able to afford $7,717.69 per month to offset your mortgage which covers Principal, Interest, Taxes, and Insurance also known as PITI.
Why San Jose and San Francisco top the list of most expensive U.S. cities isn’t far-fetched from the fact that the cities have a high concentration of tech companies. For instance, San Francisco is home to the top list of global tech firms which earns it the name ‘Silicon Valley.’
Today, to buy a home within and around the South San Francisco Bay Area of California is a luxury of millionaires and billionaires in the U.S. or top investors in the country.
Employees in these cities earn thousands of dollars annually so the offsetting mortgage isn’t a big deal for them.
For the employers, I mean the billionaires who make more money than some developing counties around the world, buying a property worth millions of dollars on outright payment isn’t something that could affect their revenues.
How much do I need to earn to buy a home in U.S. cities?
In a mortgage rate report by HSH (Home Sweet Home), which reviews the salary one needs to afford a mortgage in the top 50 U.S. cities, HSH divided the list into two: 1) most expensive metros, and 2) least expensive metros.
The amount needed to get the financial strength to afford home-buying varies from city to city. For instance, a San Diego resident needs to earn $166,828.39 to afford a home whereas another worker in Pittsburgh doesn’t need that much, he only needs to make or earn $42,858.07 yearly.
So, let’s take a look at the affordability of home ownership using how much is needed:
$350,000 to $110,000
The above salary range is for senior executives. Only 10 expensive cities fall under this category. They are:
| Rank | Metro Area | Monthly Payment covering PITI | Salary Needed |
| 1 | San Jose | $7,717.69 | $330,758.29 |
| 2 | San Francisco | $5,825.98 | $249,685.02 |
| 3 | San Diego | $3,892.66 | $166,828.39 |
| 4 | Los Angeles | $3,479.64 | $149,127.27 |
| 5 | Seattle | $3,284.59 | $140,768.06 |
| 6 | Boston | $3,038.08 | $130,203.37 |
| 7 | New York City | $3,020.70 | $129,458.62 |
| 8 | Denver | $2,844.04 | $121,887.60 |
| 9 | Austin | $2,675.85 | $114,679.39 |
| 10 | Washington, D.C. | $2,574.30 | $110,327.29 |
A country’s capital is usually the most expensive city to live in especially in some countries around the world, but the U.S case is unique. One would have thought Washington, D.C, the U.S capital, is the most expensive city to live in and buy a property.
No!
Washington, D.C isn’t among the top 5 metros to buy a home, though among the top 10. You only need $110,327.29 as an annual salary to purchase a house in the U.S. capital city.
$109,000 to $81,000
If you don’t fall in the class of people who earn at least $110K per year, then you are likely to find the list of 10 cities below suitable for you and how much you must make annually to consider fulfilling your dream home:
| Rank | Metro Area | Monthly Payment | Salary Needed |
| 11 | Portland | $2,549.56 | $109,266.67 |
| 12 | Riverside/San Bernardino | $2,477.82 | $106,192.33 |
| 13 | Sacramento | $2,471.80 | $105,934.09 |
| 14 | Miami | $2,420.69 | $103,743.70 |
| 15 | Salt Lake City | $2,355.97 | $100,970.01 |
| 16 | Providence | $2,064.47 | $88,477.40 |
| 17 | Phoenix | $2,013.54 | $86,294.62 |
| 18 | Las Vegas | $1,962.72 | $84,116.45 |
| 19 | Raleigh | $1,949.76 | $83,561.02 |
| 20 | Dallas | $1,893.85 | $81,164.99 |
Note: The above 20 cities are among the 25 most expensive cities in the U.S. to buy a home, according to HSH data. Other metros that belong to this class include Orlando ($79,572.52); Chicago ($76,463.24); Tampa ($75,416.29); Houston ($74,673.21), and Minneapolis ($74,145.28).
$73,900 to $43,000
There is a popular saying that, “fingers are not equal”, and that’s exactly what plays out in the median home price across U.S. cities. This isn’t limited to the USA, home price is not the same in major cities across the world.
If your salary is $73,900 to $43,000, there is good news for you because you are just a step away from buying your dream home in what HSH calls the least expensive cities. The monthly deduction is lesser than the first-tier cities to cover the principal, interest, taxes and insurance payments on a median-priced home.
| Rank | Cities | Monthly Deduction | Salary Needed |
| 1 | Pittsburgh | $1,000.02 | $42,858.07 |
| 2 | Oklahoma City | $1,056.99 | $45,299.47 |
| 3 | Cleveland | $1,060.46 | $45,448.11 |
| 4 | Louisville | $1,122.82 | $48,120.91 |
| 5 | St Louis | $1,143.06 | $48,988.44 |
| 6 | Detroit | $1,173.71 | $50,301.81 |
| 7 | Buffalo | $1,202.25 | $51,524.96 |
| 8 | Cincinnati | $1,209.60 | $51,840.19 |
| 9 | Memphis | $1,229.46 | $52,691.29 |
| 10 | Indianapolis | $1,250.33 | $53,585.62 |
| 11 | Birmingham | $1,298.78 | $55,661.98 |
| 12 | New Orleans | $1,349.91 | $57,853.22 |
| 13 | Virginia Beach | $1,382.39 | $59,245.39 |
| 14 | Columbus | $1,384.16 | $59,320.96 |
| 15 | Kansas City | $1,411.83 | $60,507.11 |
| 16 | Milwaukee | $1,538.18 | $65,921.81 |
| 17 | Richmond | $1,601.34 | $68,628.66 |
| 18 | Philadelphia | $1,623.29 | $69,569.45 |
| 19 | Atlanta | $1,624.43 | $69,618.60 |
| 20 | San Antonio | $1,654.37 | $70,901.40 |
| 21 | Charlotte | $1,688.13 | $72,348.43 |
| 22 | Hartford | $1,707.18 | $73,164.95 |
| 23 | Jacksonville | $1,714.18 | $73,464.79 |
| 24 | Nashville | $1,715.04 | $73,501.92 |
| 25 | Baltimore | $1,722.08 | $73,803.48 |
Wrapping up:
The cost of buying a home in the metro areas of the United States is an indication that there is still an income gap, thereby pushing more people who can’t afford mortgages to the rental market. It has also created an investment opportunity for real estate investors and companies within the country and others around the world.