DENVER, CO – Want to buy a median-priced home in Denver? A new study tells you how much annual household income you need to scrape up: $91,275.61.
Denver’s housing market now ranks ninth in the country for salary requirement needed to buy an average home in 50 metro areas, just behind Washington DC and higher than Miami, Portland, Oregon and Sacramento, according to a study from HSH.com.
The median-priced home in Denver is now $450,000, according to the National Association of Realtors. The study assumed buyers could put down 20 percent with a 4.69 percent interest rate on a 30-year mortgage. If a buyer puts down 10 percent, the salary required spikes up to $105,319.45 in metro Denver.
Home prices have gone up in metro Denver by 7.65 percent over the past year, but median household salaries in Denver County have remained around $61,105. In the metro-Denver suburban corridor, median salaries are around $71,926, according to the Denver Regional Council of Governments. The household salary needed to afford a median-priced Denver house has increased by 14.87 percent year-over-year the study said.
The study also calculated salaries based on the home-buying rule-of-thumb that no more than 28 percent of household income should go toward housing, a percentage that is harder and harder to maintain for average homeowners.
The four top most salary-gobbling places to buy a house are in California: San Jose, San Francisco, San Diego and Los Angeles. Boston is ranked fifth.
In San Jose, the study calculates you need a household salary of $256,877.50 to buy a median-priced home of $1.3 million with a monthly mortgage payment of $5,993.81.
The study’s most-affordable cities with the lowest salary needed to buy a median-priced house are Pittsburgh, Oklahoma City, Cleveland, Memphis and Indianapolis.
In Pittsburgh, a household salary of $38,879.97 will buy a median-priced home for $155,000 with a monthly mortgage payment of $907.20, the study said.
Denver’s red-hot real estate market is cooling, with more inventory, especially for homes priced above $500,000. But a growing population pushes the demand for housing higher, and keeps prices up.
"Aspiring middle-class home buyers continue to face affordably issues, as buyers are increasingly being priced out in the West while the rest of the country struggles, too," said National Association of Realtors chief economist Lawrence Yun in a press release. "The market desperately needs homebuilders to begin constructing more moderately priced single-family home and condominiums to help satisfy demand and mitigate rapid price growth."
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