Being a first-time home buyer can be intimidating—especially in NYC. That’s why Visual Capitalist has calculated the exact salary needed to buy a home in major U.S. cities. Spoiler alert: the results don’t do much to alleviate our stresses. In order to buy a home in NYC, you need to have a salary of $186.1k.
With the average New Yorker making $89,000 in 2023, the $186.1k goal seems daunting. Not to mention, less than 5% of NYC rent is affordable for those making the average salary. And even for those making above the average at $100k a year, their take home is just $35,791.
In order to determine the necessary salaries for home buying in 50 of America’s largest metropolitan cities, the study examined principal, interest, taxes, and insurance payments on a median-priced home from recent HSH data in each city. The results are considering a 30-year-fixed-rate-mortgage with a 20% downpayment.
Before 2020, the average salary Americans needed to afford a home was $59,000. Now the average necessary salary is $104,000. On the bright side, at least NYC isn’t the most expensive city in the U.S. That title is take by San Jose, California.
Purchasing a home there requires quadruple the national average monthly payment of $2,434.6, at a steep $10,824. The median price for a home in the U.S. is $389,400; but for San Jose, it’s a whopping $1,840,000. Therefore, those buying a home in San Jose must make a yearly salary of $463,886.5—nearly half a million.
Inversely, Cleveland, Ohio requires the lowest salary of the 50 analyzed cities. Interested home buyers only need to make $58.4k. For context, New Yorker’s salaries need to be three times greater than the people in Cleveland to afford a home in their city. When taking a broader look at NYC, the median price for a home is $659,200 with a monthly payment of $4,342.9.
So if you’re planning on buying a home, be sure to understand what city makes the most sense for your finances. Or, you can try testing your luck with winning an NYC housing lottery! 😉
You can find the remaining figures for other U.S. cities in the study.