Here’s the Salary You Need to Buy a Modest Home in New York City, San Francisco & 25 Other Places

Original Post by Taryn Williford | Sep 7, 2016

(Image credit: David Dines)

It’s funny how buying a home became known as “The American Dream,” because for decades, it wasn’t a dream at all. Just a few generations ago (basically: your grandparents), buying a house in your 20’s was just reality.

I love this story from Relative Realty about a couple of real first-time buyers in Toronto—Ron and Joan, both “in their early 20’s”—achieving The American Canadian Dream. They bought a two-story semi-detached home in 1958 for $16,900 (CAD), and it sounds like a fairy tale:
Their down payment was $1500, $500 saved and $1,000 from inheritance. Ron brought home $3,500 a year as a police cadet and, at $75/month for the mortgage and a few lump sum payments, they paid off their home in 15 years.

Once upon a time, you could buy a nice home in a nice neighborhood on a salary of $3,500. And it would only take you 15 years to pay off your mortgage. And then everyone lived happily ever after in a castle they owned outright and retired at 65.

The end.

Could Ron and Joan Buy Their House Today?

According to Relative Realty, Ron and Joan’s house is worth more than $400,000 today, 23.7 times their 1958 purchase price. Yet Ron’s $3,500 police salary would be equal to bringing home $29,877 per year in 2016 dollars—only 8.5 times his 1958 salary—according to the inflation calculator from Bank of Canada. All else being equal, Ron and Joan never could have bought that house today.

So how much would it take? Using a financing calculator from a Canadian realtor,Premiere Mortgage Center, in order to buy that same $400,000 house today with 10 percent down (Ron and Joan’s 1958 down payment was around 8 percent) and pay it off in 15 years, you’d need to make around $112,000 annually. And if you’re willing to sign up for a 30-year loan instead, you’ll still need to be making around $77,000 per year—still more than double Ron’s adjusted salary.

The moral of the story is this: It’s a lot harder, financially, to own a home today than it was for our grandparents, and it requires a much larger salary.

(Image credit:

What Salary Do You Need to Buy a Home in 2016?

There are a lot of variables that come into play when it comes to figuring out how much house you can afford, and the only way to know for sure is to talk to a lender (or three—shop around) to review your actual salary, cash, credit and rates. But mortgage resource has crunched some numbers in order to give us a general snapshot of the earning power required to become a homebuyer in 27 different U.S. metro areas.

Using the median home price in each city (from the National Association of Realtors) and the average 30-year fixed-rate interest rate in each area (from HSH’s own data), was able to determine the total salary required to afford the base cost of owning a home—the principal, interest, taxes and insurance—in each area.

Here’s how it shakes out nationally:


Median home price: $240,700
Monthly payment: $1,229.65
Salary needed: $52,699.17

And in New York City:

New York City

Median home price: $395,400
Monthly payment: $2,011.69
Salary needed: $86,215.44

The most affordable city was Pittsburgh:


Median home price: $140,500
Monthly payment: $755.77
Salary needed: $32,390.09

And the least affordable was San Francisco:

San Francisco

Median home price: $885,600
Monthly payment: $3,778.78
Salary needed: $161,947.60

If you’re thinking about buying a home someday soon, these numbers should offer a small gut check to see how close you are to making The American Dream a reality. And, it’s important to note, first subtracted a 20-percent down payment from the NAR median home prices, so if you’re thinking about putting down less (like the 3.5% required for an FHA loan), you’ll need to earn even more to afford your monthly payments.

To discover more about how these numbers were determined, or to view the full stats for each of the 27 cities, visit

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