Home ownership rates are on the rise in our country, but low salaries can still be an impediment when you want to buy.
Unless, of course, you live in a metro area that doesn’t require a huge salary to cover all the costs of home ownership!
10 metro areas where home ownership is most affordable
HowMuch.net recently examined median-home price data, national mortgage rate data and property tax and homeowner’s insurance costs in the nation’s 50 largest metro areas.
What they came up with was a list of the most affordable metro area real estate markets and how much annual salary you need to earn to afford a home:
10. Buffalo, NY – $45.7K
9. Birmingham, AL – $44.6K
8. St. Louis, MO – $44.2K
7. Cincinnati, OH – $43.4K
6. Louisville, KY – $42.3K
5. Indianapolis, IN – $42.2K
4. Memphis, TN – $41.4K
3. Oklahoma City, OK – $41.3K
2. Cleveland, OH – $40.4K
1. Pittsburgh, PA – $37.6K
The 90% mortgage rule
Money expert Clark has a simple rule of thumb to follow when shopping for a mortgage: See what you qualify for when it comes to a traditional 30-year fixed rate loan. Then back off and go house shopping at only 90% of that dollar amount.
“So if you qualify for a $200,000 mortgage, for example, don’t look at houses above $180,000. By doing that, you will help create extra financial breathing room in your life,” Clark says.
“The expense of housing is like a rubber-band — stretch it too far and it will break. Stay at 90% or lower and your wallet will smile.”