It’s not hard to find headlines of home prices reaching new heights in metros across the country – we have many of our own seen here, here and here, to name a few.
And even rising mortgage rates isn’t enough to slow down home prices, the Federal Housing Finance Agency showed in its fourth quarter 2016 House Price Index report.
But exactly how much would homebuyers need to earn in order to buy a home? SmartAsset, a financial technology company, put together data from the U.S. Census Bureau and its own mortgage calculator to do just that.
However, keep in mind that the income required in each city is based on putting a 20% down payment, however many banks offer 3% down options for 30-year fixed-rate mortgages.
SmartAsset also assumed a 4% interest rate for 80% of the home value, the balance after the down payment, an annual home value increase of 2%, annual inflation of 2% and that buyers will have annual homeowners insurance of 0.5%.
Here are the income levels potential buyers need to buy a home in these top 10 largest cities across the U.S., and the median home prices in those cities, according to data from real estate website Trulia.
10. Phoenix, Arizona
Annual Income needed: $26,803
Median sales price: $209,900
9. Houston, Texas
Annual Income needed: $27,067
Average listing price: $392,985
8. Dallas, Texas
Annual Income needed: $27,505
Average listing price: $718,471
7. Chicago, Illinois
Annual Income needed: $44,244
Median sales price: $244,000
6. Austin, Texas
Annual Income needed: $47,523
Average listing price: $558,967
5. San Diego, California
Annual Income needed: $75,816
Median sales price: $512,000
4. Los Angeles, California
Annual Income needed: $77,230
Median home price: $702,500
3. New York City, New York
Annual Income needed: $96,993
Median sales price: $1,186,649
2. San Jose, California
Annual Income needed: $99,963
Median sales price: $750,000
1. San Francisco, California
Annual Income needed: $128,598
Median sales price: $1,136,000
