Salary needed to buy a house is all over the map

Mortgage rates are still low, making it a seemingly great time to buy a home.

But aspiring homebuyers still need to overcome one major obstacle before they lay eyes on their dream home: Can they afford it?

The typical U.S. worker now needs to earn $52,700 a year to be able to afford the monthly payments for a home worth the national median of $240,700, according to a recent report by HSH.com, a mortgage information website.

That threshold can look very different from one city to the next. For instance, someone in Atlanta only needs to earn about $40,000 to afford a monthly mortgage payment — one of the most affordable cities on the list. But someone trying to buy a house in Washington, D.C., would need to earn twice as much. In San Francisco, a buyer would need to earn four times as much. Houston is a little below HSH.com’s national threshold at $52,274.

Analysts calculated how much homeowners need to earn each year so that the monthly mortgage payments for the medianpriced home — including the principal, interest, taxes and insurance — would take up no more than 28 percent of monthly gross income. (Financial advisers generally recommend that housing costs take up no more than a third of your pay.) The study also assumed that buyers had a 20 percent down payment.

As home prices rise, the salary needed to afford a home is rising too. (And in many cities, those home prices are growing much faster than wages.) The average salary needed to afford a home this year is up 5 percent from 2014, when consumers needed a salary of $50,211 to afford the median-priced home of $212,000.