To buy a home in the Washington area, one needs to earn a salary of $62,809, making this area the sixth most expensive in the nation.
That’s the finding from a study by HSH.com, a publisher of publisher of mortgage and consumer loan information.
HSH.com took the National Association of Realtors’ median home prices and its own average interest rate for 30-year, fixed-rate mortgages to determine how much money homebuyers in 25 cities would need to earn in order to afford the principal and interest payment on a median-priced home in their market.
San Francisco came in first, with $115,510, followed by San Diego, Los Angeles, New York, and Boston. The entire list can be found on HSH.com. Among the lowest incomes needed to buy a house: Cleveland ($19,435), Cincinnati ($22,226) and St. Louis ($22,397).
For the Washington-area formula, HSH used a home price of $368,000, a 4.5 percent loan, 20 percent down, and a monthly payment of $1,465.56.
The required salary to afford a median-priced home in the D.C. metro area jumped more than $14,000 between the first and third quarter of 2013, says HSH.
Still, the formula seems rather suspect in a county where the median household income is $107,096, the third-highest in the United States. And the median home price in Fairfax County is $442,370 — far out of reach for a person with an income of $62,809.
Reston Now Real Estate columnist Eve Thompson says a buyer around here with a $62,000 salary would not typically qualify to purchase a $368,000 home. She says that buyer would likely be approved for a purchase around the $260,000 level.
Food for thought as home prices continue to rise in Reston.
Photo: Townhouse on Wainwright listed at $359,900, or within reach of a Washington-area resident making $62,809, says HSH.com/Credit: MRIS.