Let’s Make a Game Plan
Boost your investment game with expert real estate insights. We'll keep you up to date on everything you need to know to be the smartest real estate investor you can be.
In 14 of the 50 largest metropolitan areas in the country, homebuyers now need to earn more than $150,000 to afford a home, according to Realtor.com. In some metros, especially those in California, it’s even more.
Here is Realtor.com’s list of the top 10 metros where homebuyers need the highest median incomes, assuming a 20% down payment, a mortgage rate of 6.99%, plus local taxes and insurance rate:
- San Jose, CA – $361,000
- Los Angeles, CA – $298,000
- San Diego, CA – $259,000
- San Francisco, CA – $256,000
- Boston, MA – $226,000
- New York, NY – $218,000
- Seattle, WA – $193,000
- Denver, CO – $161,000
- Sacramento, CA – $162,000
- Washington, DC – $159, 000
Our take
We love to bust myths, and this is a big one. There’s a false belief that because tech hubs like San Jose top this list, tech money is causing home prices to spike due to gentrification. Gentrification is happening, but that’s not what’s causing this trend in California. The blame is squarely on state and local policymakers who are refusing to build enough homes to keep up with population growth. For example, Austin (population: 2.4 million) permitted more housing units last year—especially large (five or more units) apartment buildings—than the Los Angeles (population: 12.8 million) and San Francisco (population 4.6 million) metros combined. Texas and Florida are seeing an influx of tech workers, but housing prices are stagnating. Why? Because those states are building everywhere. If more locales would simply allow more home construction, it would do wonders for their economies.