Another Top-10 List — How Much You Need to Earn to Afford a Home in the 10-Largest U.S. Cities

In my original blog in October 2008 introduced was the TINSTAANREM axiom — There Is No Such Thing As A National Real Estate Market. Nor is there a consistent nationwide cost of housing. To illustrate these axioms, following is an overview of a study completed by smartasset comparing the required median household income necessary to purchase a home in the 15 largest U.S. cities.

Their methodology and assumptions included:

  • Median U.S. home value in each city
  • 20 percent down payment
  • Buyer acquired a 30-year conventional fixed-rate loan at 4 percent
  • Home value increases 2 percent per year (impacting both property taxes and annual home insurance expenses)
  • 2 percent per year inflation rate
  • Annual home owner’s insurance costs 0.5 percent of the value of the property
  • Prospective homebuyers had no additional debt
  • Utilized smartasset’s mortgage calculator to estimate the total monthly housing payment that also included an adjustment for local property taxes (which vary significantly from one state to the next)

So what were the comparative costs across the 10-largest U.S. cities?

3-7-17 table


To read the entire article and list of the 15-largest cities click

Want to calculate this for your own market? Click to use smartasset’s mortgage calculator.

In some of these cities, housing remains relatively affordable — in others, not. In San Francisco, smartasset calculated a required $128,600 required minimum annual income. Unfortunately they report the average household income for San Francisco is just $81,000. In Houston, for example, the required minimal annual income is $27,100 versus an actual average income of $46,000.

Obviously, not all people migrate to the city of the lowest overall comparative housing cost.

Trust the TINSTAANREM axiom.



  1. Michelle

    Interesting study, but isn’t assuming buyers have no additional debt pretty unrealistic given the average American household is up to their ears in consumer debt? I’m curious what the minimum incomes would need to be after taking that into account.

    1. Ted

      I think when they say no other debt they are talking about HELOC loans or second loans for the down payment. It really makes no difference if they also had a car loan.

      Where this study varies is their median home prices. I think used a five-year series and it does not correspond to the 2016 medians, for example.

      Great to hear from you.


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