Do You Make Enough to Buy a House? Depends (Heavily) On Where You Live.

If you live in Cleveland, you probably have a far better shot at homebuying than in San Francisco.

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For many Americans, homebuying is a hallmark of the American dream. But according to new data, it could be a much less attainable dream in San Francisco or San Diego than in Cleveland or Cincinnati.

Mortgage information site has compiled a breakdown of the minimum salary needed to buy a home in 25 major U.S. cities. What they found is that home affordability varies widely nationwide.

In Cleveland, the necessary salary to pay principal and interest on a home is $19,435, with median home prices at $112,800. Meanwhile, San Francisco is at the far opposite end of the spectrum, with a necessary salary of $115,510 – more than $30,000 more than the next city on the list, San Diego, where the needed salary is $81,570.

The organization based its calculations on the cost of a median-priced home in each of these cities, as well as 30-year fixed-rate mortgage rates as of the fourth quarter of 2013. The necessary salary is calculated using the common standard that a person should spend no more than 28 percent of her gross income on house payments.

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But then there’s the question of how many people in a given city are making that salary. So U.S. News broke down the numbers by median household income. The below interactive map shows how large those suggested homebuying salaries are, compared to median incomes in these cities.

Sources:, Census Bureau (median household income figures are metropolitan-area figures for 2012, inflation-adjusted to 2013 levels), Bureau of Labor Statistics.

HSH’s numbers are only for these select large cities for which data are available, so it’s hard to extrapolate about nationwide trends. However, the numbers still do illustrate some basic points.

One is that affordability is relative. In Washington, D.C., for example, the calculated salary needed to buy a home is more than $62,800 – among the highest on the list, and comparable to Boston’s price, at nearly $63,700. However, when median household income is taken into account, D.C. looks much more affordable. That metro area has the highest median income of all 25 places listed, at more than $89,500, meaning the median household income is nearly 143 percent of the necessary salary. In Boston, where median income is only around $73,000, the ratio is 114 percent.

Put another way, median incomes tell you something about how many people in a city can afford a home. The median household income in the New York City metropolitan area is almost 100 percent of HSH's recommended salary. That means around half of all metro area residents could buy a home there. In Cincinnati, meanwhile, median household income is nearly 2.5 times the suggested income, meaning a majority of households in that metro area could, by this formula, buy a home there.

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Another is that these prices represent improved affordability from the prior quarter. In most of these cities prices and mortgage rates fell at the end of last year, meaning affordability improved for homebuyers.

"In the third quarter we had some of the highest interest rates show up in about two years," says Keith Gumbinger, vice president at That pushed home prices down, he adds. "What we find is in looking for that balance of affordability, if interest rates are rising, and we did have that in the third quarter, means home prices have to decline somewhat." That means in the fourth quarter, when interest rates also fell, affordability improved for homebuyers, he says.

However, low mortgage rates only go so far in making homes more affordable. San Francisco, the city with the highest median home price ($682,410) and the highest calculated salary needed to buy that home ($115,510), also had the lowest mortgage rates of all 25 cities, at 4.28 percent. In addition, it had the lowest ratio of median household income to suggested salary, at nearly 66 percent.

However, it's important to note that none of this means a person making HSH’s recommended salary is necessarily ready to buy a home. The figures are bare minimums, HSH points out in its methodology, and don’t take into account factors such as those huge down payments that come before the monthly payments kick in.

“There is no doubt that your income will need to be much higher, possibly even double or triple this level, to cover the needed taxes, insurances and other expenses to live in the home, plus the down payment and any other debts you might have,” HSH says.