30 Places Where a $100K Salary Isn’t Enough to Own a Home
Many people have to ask themselves this question at some point: “How much house can I afford?” The answer depends on the salary you need to buy a home in your area while still being able to pay for related expenses. If you’re making a six-figure salary, you should be able to afford a home priced above the average list price in the U.S., which is $279,000, according to Zillow.
But just crossing the six-figure salary threshold isn’t enough to afford the average-priced home in some cities — especially those on the West Coast. To help you figure out where you’ll need more money, GOBankingRates looked at cities where a $100,000 salary isn’t enough to buy and own a home. The median list price for homes in this study starts at over $500,000.
To avoid being what the government considers “cost burdened,” the study took into account that homeowners should spend no more than 30% of their monthly gross income on a mortgage payment, interest, property tax, utilities and maintenance expenses. However, the lower the percentage, the better. If you’re looking to move to one of these locations, be aware of how much you’ll actually need to make to live comfortably.
30. Salinas, California
Annual income needed: $111,910
Median home list price: $519,000
To afford a home in Salinas, you’ll need a monthly income of at least $9,033 to help pay a monthly mortgage of $2,710. Annual utility costs are $3,509.94 — ranking the fourth lowest on the list.
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29. Chula Vista, California
Annual income needed: $113,503
Median home list price: $525,000
You won’t save as much on utility costs in Chula Vista as you would if you lived in most of the other places on this list because you’ll pay almost $4,000 annually. Monthly mortgage costs will set you back only $2,739, which is cheaper than everywhere but Salinas.
28. Oxnard, California
Annual income needed: $114,088
Median home list price: $531,250
The annual income needed to live in Oxnard is $114,088, so you likely won’t find homes for anywhere close to $100,000. But expenses aren’t the highest on the list. You’ll need a monthly income of $9,227 to pay a $2,768 mortgage, and Oxnard has the second-lowest utility costs on the list at $3,368.01.
27. Rancho Cucamonga, California
Annual income needed: $114,515
Median home list price: $529,910
Rancho Cucamonga is the smallest city on the list, but annual utility costs aren’t the cheapest. Those costs are one of the reasons you’ll need more than a $100,000 salary to live here. At $4,035.47, utilities are higher than all but seven places on the list. The cost of a monthly mortgage here is still below $3,000, however, totaling $2,762.
26. Santa Ana, California
Annual income needed: $117,955
Median home list price: $549,900
Although not among the top 10 lowest on the list, Santa Ana has lower annual utility costs — $3,755.44 — than many of the other listed places in California. As far as monthly mortgage costs, the city ranks among the five lowest at $2,855.
See: Best Places to Buy a Home for First-Time Homebuyers
25. Jersey City, New Jersey
Annual income needed: $118,492
Median home list price: $549,900
Although Jersey City is quite a bit larger than Santa Ana, the two cities share many facts in common, including median home list price, monthly mortgage cost and monthly income required. But in Jersey City, you’ll pay over $500 more a year in utility costs.
24. Oceanside, California
Annual income needed: $121,655
Median home list price: $569,000
If you live in Oceanside, you’ll need less than $10,000 in monthly income. Annual utility costs aren’t the cheapest or the most expensive compared to the rest of the list at $3,855.18.
Read: 20 Gorgeous Beach Towns You Can Afford to Live In
23. Santa Clarita, California
Annual income needed: $122,967
Median home list price: $575,000
With a utilities cost of $4,046.98 annually and mortgage cost of $2,973 a month, expenses can quickly add up. You’ll need a monthly income of $9,910 to afford living here.
22. Washington, D.C.
Annual income needed: $124,826
Median home list price: $584,900
D.C.’s monthly mortgage cost breaks the $3,000 mark. Plus, annual utility costs are over $4,000 annually. You’ll need a monthly income of $10,063 to live here.
21. Long Beach, California
Annual income needed: $126,405
Median home list price: $595,000
The annual utility costs in Long Beach are $3,724.76 and a monthly mortgage is $3,067. You’ll need a salary of $10,223 per month to afford to live here.
20. Santa Rosa, California
Annual income needed: $126,995
Median home list price: $598,900
You’ll need a monthly salary of $10,270 to live in Santa Rosa. To pay your monthly mortgage bill, $3,081 of your monthly income will have to be allotted to it.
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19. Anaheim, California
Annual income needed: $127,176
Median home list price: $599,000
With a median home list price approaching $600,000, Anaheim residents can expect their monthly mortgage bill to be a little under $3,100. It takes a monthly salary of about $10,300 to afford living here.
18. Garden Grove, California
Annual income needed: $127,367
Median home list price: $599,900
Utility costs in Garden Grove equal close to $3,800 per year. You can expect to pay about $3,090 for a monthly mortgage — just a few dollars more than what it costs in Anaheim and Santa Rosa.
17. Escondido, California
Annual income needed: $127,831
Median home list price: $599,999
Escondido has comparable costs to Garden Grove for median home list price, monthly mortgage cost and monthly salary required. Where the two cities differ the most is related to annual utility costs. In Escondido, you’ll pay $464.18 more per year.
16. Scottsdale, Arizona
Annual income needed: $128,448
Median home list price: $604,950
Scottsdale’s median home list price is the first on the list to break the $600,000 mark, and a monthly mortgage here will cost you $3,113. Annual utility costs hover right under $4,000.
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15. Oakland, California
Annual income needed: $140,024
Median home list price: $669,000
In Oakland, the median home list price might be much more expensive than other places in California — like Salinas and Chula Vista — but the annual utility costs are less. You’ll need a monthly salary of $11,380 to live here.
14. Honolulu
Annual income needed: $140,683
Median home list price: $655,000
Honolulu has the highest annual utility costs on the list at $6,762.87, but its median home list price doesn’t even make the top 10. You’ll need a monthly salary of $11,160 to live here.
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13. Seattle
Annual income needed: $142,919
Median home list price: $688,944
Seattle has the lowest annual utility costs on the list at $2,639.17. A required monthly salary of $11,690 is what it takes to afford to live here.
12. San Diego
Annual income needed: $144,263
Median home list price: $689,000
When compared to Seattle, San Diego has a similar median home list price, monthly mortgage cost and monthly salary required. The difference in annual utility costs is huge, however. San Diego’s costs are approximately $1,300 more a year.
11. Hayward, California
Annual income needed: $144,508
Median home list price: $692,495
Hayward’s median home list price is a little under average for the list: $692,495 versus $699,364.75, respectively. In addition, the city’s annual utility costs of $3,548.30 are about $500 less than the list’s average of $3,945.71.
10. Boston
Annual income needed: $151,520
Median home list price: $725,000
Boston’s median home list price breaks the $700,000 mark and then some, which ranks it above the list’s average of approximately $699,365. Annual utility costs are the third highest on the list at $4,480.45.
9. Arlington, Virginia
Annual income needed: $152,691
Median home list price: $735,000
Annual utility costs in Arlington will set you back $3,770.79, and a monthly mortgage bill equals $3,723. You’ll need a monthly salary of $12,410 to afford to live here.
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8. Los Angeles
Annual income needed: $164,714
Median home list price: $799,900
The city’s utility costs are the sixth lowest at $3,594.33, which is good news because the city’s median home list price is one of the highest on the list, carrying a monthly mortgage bill of $4,028. To afford to live in L.A., you’ll need $13,427 in monthly income.
7. New York
Annual income needed: $165,013
Median home list price: $790,000
It’s no secret that home prices in the Big Apple are high, but the average monthly mortgage comes in almost $50 lower than what you’ll pay in L.A. — $3,981 versus $4,028, respectively. Annual utilities are considerably more expensive overall in New York at $5,773.18 — over $1,800 higher than the average cost out of all the places on the list.
6. Glendale, California
Annual income needed: $176,213
Median home list price: $859,999
The median home list price in Glendale is almost $61,000 more than the price in L.A. On a smaller scale, annual utility costs are almost $300 more per year.
Related: How Rich You’d Be If You Bought a Home in These Cities 20 Years Ago
5. Huntington Beach, California
Annual income needed: $178,898
Median home list price: $875,000
Cities in California fill the top five spots on this list. To afford to live in this city, you’ll need $14,600 per month. Your expenses could include a mortgage of $4,380 and average annual utility cost of approximately $3,700.
4. San Jose, California
Annual income needed: $192,993
Median home list price: $950,000
Living in San Jose is far from cheap with a monthly mortgage bill of $4,732 and annual utility costs of $3,713. To cover expenses each month, you’ll need to bring in approximately $15,773.
3. Fremont, California
Annual income needed: $203,204
Median home list price: $1,004,995
Fremont, California, breaks the $1 million mark for median home list price. You’ll need a monthly income of $16,630 to live here. Annual utility costs, however, are below average for the list at $3,644.20.
2. Irvine, California
Annual income needed: $206,171
Median home list price: $1,020,000
Irvine is definitely not one of the most affordable places to buy a home in the U.S. In fact, it’s one of the most expensive cities on the list. To afford to live here, you’ll need a monthly income of $16,867. Monthly mortgage expenses are the second highest on the list at $5,060.
1. San Francisco
Annual income needed: $257,700
Median home list price: $1,295,000
San Francisco is one of the most expensive places to live on the list. It has the highest median home price and highest monthly mortgage expense of $6,349. It also requires the highest monthly salary, by far, at $21,163.
How Much Home Can I Afford?
When you’re ready to buy and wondering “How much mortgage can I afford?” here are some tips to help you determine the answer:
Use an affordability calculator to find out how much house you can afford.
Plug the home price you got from the affordability calculator into this mortgage calculator to estimate how much a mortgage payment, taxes and insurance would cost you each month.
Estimate an amount for utilities and maintenance and add that to the total monthly payment amount.
If the monthly expenses exceed 30% of your gross pay, you’ll need to find a cheaper home.
Click through if you’d rather build your home and want to know the most and least expensive states to build a home.
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Methodology: GOBankingRates found 30 U.S. cities where a $100,000 salary isn’t enough to buy a home. GOBankingRates began the study by exporting Median List Price data from Zillow and filtered that data by cities where homes are listed at $500,000 or more. Once filtered, GOBankingRates found the monthly mortgage payment amount assuming there is a 30-year fixed loan with an interest of 4.08% which is the United States average using Zillow’s mortgage calculator. This accounts for the estimate of monthly mortgage payments for your new home, including property taxes, insurance and PMI. GOBankingRates created this list starting with the biggest U.S. city where homes are listed at a median list price of $500,000 or more. GOBankingRates assumed that 30% of your monthly income should go toward homeownership costs which include mortgage payments, mortgage interest, property taxes, maintenance and utility costs. Next, GOBankingRates annualized that number to find how much a person would need to earn annually to afford a house in each city that is included in this study. Annual utility costs were found by using Sperling’s Best cost of living index for each city and each index amount was multiplied by the national average spent on utilities sourced from Bureau of Labor Statistic’s 2017 Consumer Expenditure Survey. GOBankingRates added all housing costs together and found the difference between each city’s annual income needed and $100,000 and the cities are ranked from those with the biggest difference to the smallest difference. All salaries needed are pre-tax salaries.
This article originally appeared on GOBankingRates.com: 30 Places Where a $100K Salary Isn’t Enough to Own a Home
