10 Metros Where a Home Costs About $1,000/Month

© David Liu/Getty Images; SeanPavonePhoto/Getty Images; Songquan Deng/Getty Images
© David Liu/Getty Images; SeanPavonePhoto/Getty Images; Songquan Deng/Getty Images

More often than not, real estate headlines seem to be occupied with just how unaffordable housing is in many parts of the country. But the truth is there are a multitude of metro areas you can afford to buy in, even if you earn a modest salary.

Based off our 27-metro list, HSH.com has compiled 10 metro areas where you can afford the principal, interest, taxes and insurance on a median-priced home for only around $1,000 per month:

CLEVELAND: $685.85/MONTH

Mortgage rate: 3.82 percent

  • Quarterly change: -0.23 percent

Home price: $105,900

  • Quarterly change: -12.62 percent
  • YOY change: +3.72 percent

Monthly payment: $685.85

Salary: $29,393.54

  • Quarterly change: -$2,616.87

Cleveland retakes the crown as the most affordable metro area on our list during the first quarter of 2015. The largest quarterly home-price decline on our list was more than enough to make Cleveland No. 1 in terms of affordability. For $685.85 a month, Cleveland-area home buyers can afford the principal, interest, taxes and insurance on a median-priced home.

PITTSBURGH: $718.36/MONTH

  • Quarterly change: -0.23 percent

Home price: $131,000

  • Quarterly change: -2.96 percent
  • YOY change: +9.17 percent

Monthly payment: $718.36

Salary: $30,786.94

  • Quarterly change: -$929.38

Pittsburgh lost its top spot as the most-affordable metro area in the first quarter of 2015, requiring a yearly salary nearly $1,400 higher than Cleveland. But affordable conditions haven’t gone anywhere in the Steel City. You can afford the principal, interest, taxes and insurance while earning just $718.36/month.

ST. LOUIS: $760.83/MONTH

Mortgage rate: 3.82 percent

  • Quarterly change: -0.21 percent

Home price: $134,800

  • Quarterly change: -2.60 percent
  • YOY change: +11.87 percent

Monthly payment: $760.83

Salary: $32,606.92

  • Quarterly change: -$716.17

Quarterly mortgage-rate and home-price declines kept St. Louis as the third-most affordable metro on HSH.com’s list. Home buyers in the St. Louis metro can earn $760.83/month and still afford the principal, interest, taxes and insurance on a median-priced home.

CINCINNATI: $763.97/MONTH

Mortgage rate: 3.86 percent

  • Quarterly change: -0.23 percent

Home price: $135,000

  • Quarterly change: -2.24 percent
  • YOY change: +10.93 percent

Monthly payment: $763.97

Salary: $32,741.64

  • Quarterly change: -$743.59

It takes only a few extra dollars a month to afford the median-priced home in the Cincinnati metro as compared to the St. Louis metro. In fact, to afford the principal, interest, taxes and insurance, Cincinnati buyers only need to earn an extra $3/month.

DETROIT: $814.39/MONTH

Mortgage rate: 3.92 percent

  • Quarterly change: -0.26 percent

Home price: $135,000

  • Quarterly change: -0.59 percent
  • YOY change: +21.90 percent

Monthly payment: $814.39

Salary: $34,902.43

  • Quarterly change: -$619.04

Detroit-area buyers and sellers both have to be happy with the short-term stability and long-term growth of home prices in the Motor City metro. Slight declines led to even more affordable conditions in the first quarter as buyers need just $814.39/month.

ATLANTA: $830.15/MONTH

Mortgage rate: 3.84 percent

  • Quarterly change: -0.25 percent

Home price: $158,000

  • Quarterly change: +0.19 percent
  • YOY change: +11.35 percent

Monthly payment: $830.15

Salary: $35,577.84

  • Quarterly change: -$222.26

Atlanta is the first metro so far on our list to have experienced both quarterly and yearly price increases. Balancing out the modest quarterly increase was a decline in mortgage rates of one-quarter percent, reducing the required annual salary by $222, the smallest salary decline so far.

TAMPA: $894.05/MONTH

Mortgage rate: 3.91 percent

  • Quarterly change: -0.22 percent

Home price: $156,000

  • Quarterly change: -2.50 percent
  • YOY change: +7.59 percent

Monthly payment: $894.05

Salary: $38,316.50

  • Quarterly change: +$584.30

The Tampa metro is a great example of how principal and interest are not the only components of a monthly mortgage payment. Despite quarterly rate and price declines, the required monthly payment rose during the first quarter. The reason was that insurance costs were higher in Tampa. Homebuyers must earn at least $894.05/month to afford the principal, interest, taxes and insurance on a median-priced home in the Tampa metro.

PHOENIX: $950.36/MONTH

Mortgage rate: 3.82 percent

  • Quarterly change: -0.24 percent

Home price: $206,100

  • Quarterly change: +2.90 percent
  • YOY change: +6.07 percent

Monthly payment: $950.36

Salary: $40,729.60

  • Quarterly change: +71.52

While Phoenix is the first metro area on this list to crack the $200,000-home-price mark, buyers can still learn less than $1,000/month and afford the median-priced home. Quarterly home-price growth was enough to push the required salary higher, but it was only by $6/month.

ORLANDO: $1,033.48/MONTH

Mortgage rate: 3.86 percent

  • Quarterly change: -0.21 percent

Home price: $186,000

  • Quarterly change: +3.33 percent
  • YOY change: +4.49 percent

Monthly payment: $1,033.48

Salary: $44,291.94

  • Quarterly change: +$2,148.63

The Orlando metro went from a near-$500 annual salary decline in the fourth quarter of 2014 to an increase of over $2,100 — the second-highest salary increase on our list – in the first quarter. Affordability took a step back in this metro area during the first three months of 2015, and now buyers must earn $1,033.48/month to afford the median-priced home.

SAN ANTONIO: $1,050.42

Mortgage rate: 3.93 percent

  • Quarterly change: -0.16 percent

Home price: $184,700

  • Quarterly change: -0.43 percent
  • YOY change: +9.10 percent

Monthly payment: $1,050.42

Salary: $45,018.15

  • Quarterly change: -$356.15

While San Antonio is the most affordable Texas metro on our 27-metro list, it’s the most expensive on this smaller, $1,000/month group. The mortgage rate and price declines of 0.16 percent and 0.43 percent, respectively, helped increase annual affordability to the tune of $356 during the first quarter. San-Antonio-area buyers must earn $1,050.42/month to afford the principal, interest, taxes and insurance on a median-priced home.

Methodology 

To compile these results, HSH.com calculated the annual before-tax income required to cover the mortgage’s principal, interest, tax and insurance payment. We used standard 28 percent “front-end” debt ratios and a 20 percent down payment subtracted from the median-home-price data to arrive at our figures. Loans with less than a 20 percent down payment will incur mortgage insurance, which would in turn increase the required salary.

We utilized the NAR’s 2015 first-quarter data for median home prices and our 2015 first-quarter average interest rate for a 30-year, fixed-rate mortgage to determine how much money homebuyers in 27 major metro areas would need to earn in order to purchase the median-priced home in their market.

The average mortgage rate information we used was for purchase-money mortgages made to borrowers with good to excellent credit.

Data for the Pittsburgh metro area was provided by RealSTATs, a locally owned and operated real estate information company. Home-price data for Detroit was provided by Realcomp II Ltd., Michigan’s largest Multiple Listing Service.

Written by Tim Manni of HSH.com

(Source: HSH)

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