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Gaps widen for incomes needed to afford homes in 10 metro areas

February 9, 2024

For many would-be homeowners, a recent report has some daunting numbers.

Potential purchasers of homes in the Seattle area need to earn $215,000 a year to afford a typical home. That’s up 18% from a year ago and about $100,000 more than the U.S. average, according to a report from Redfin.

Census data estimates the median annual household income in the Greater Seattle metro area was about $107,000 last year.

In King County, the median price of homes and condos that sold during January was $760,000. The U.S. median home price was $420,000 (based on August data). Analysts say annual earnings of $115,000 would be needed to afford such a home.

When compared to other cities, Seattle ranks eighth based on annual income needed to afford a typical home. San Francisco tops the list followed by six other metros in California. New York ranks ninth, with Boston claiming 10th place. Homebuyers in San Francisco need to make $404,000 to afford the median monthly mortgage payment.

Real estate experts believe a monthly mortgage payment is considered affordable if the homebuyer spends no more than 30% of their income on housing. For Redfin’s report, researchers used an area’s median monthly mortgage payment, then calculated how much a buyer would need to make in that location to stay below that 30% threshold.

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