How Much Do You Need to Earn to Buy a House in a Major U.S. City?

House made of money

When purchasing a new home, there are many factors to consider. One of the biggest, of course, is just how much it will cost. Prices will vary greatly depending on where you live, or where you'd like to live. On top of the basic price of the property, there are other costs associated with the purchase of a home that must be accounted for, including title insurance, surveys, and prepaid property insurance, amongst a list of other types of closing costs. This can make it difficult to determine exactly how much money you really need to earn to afford the home you want.

Required Salary Comparison

The following table compares the cost to own a home in 10 major US cities. To give you a starting point to compare values, the first entry in the table is the national average across the U.S. The next columns contain information regarding average mortgage rates, home prices, mortgage payments, and the suggested annual salary needed to afford a home at the listed price. These numbers assume a down payment of 20% of the purchase price, and a 30 year fixed-rate mortgage.


Mortgage Rate

Average Price

Monthly Payment

Salary Needed






New York City





Los Angeles




















Washington DC















St. Louis










Data Sources:

As you can see, prices vary from one city to another. These numbers can also change depending on how much cash you have available for a down payment. If you are unable to put down 20% of the total purchase price, your monthly payments will be higher, which means you will need to make more money to comfortably afford the payment. This mortgage calculator can help you better estimate what your payments will look like, depending on how much money you put down and what interest rate you can qualify for.

Other Things To Consider

When deciding where to buy a home, it's important to keep other things in mind, besides the monthly mortgage payment.

State and Local Taxes

There will be property taxes that must be paid in the state where you buy. Some cities will assess additional taxes. Taxes are usually assessed yearly and will add to your overall housing expenses.

Employment Opportunities

Depending on your career, you may find employment opportunities are better in one place as opposed to another. For example, if you work in a technology field, you will probably find better job offerings near Silicon Valley in California. If you work in the financial sector, your job prospects will likely be better in New York City.

Average Salaries

Just as the cost of buying a home varies from place to place, salaries vary as well. Aside from being able to afford to purchase a home, you'll need to decide if average local salaries in your field will allow you to reach other financial goals you may have, including saving for retirement.

Homeowners Insurance

With any mortgage, you will need to purchase homeowners insurance. You might also be required to carry extra insurance, such as flood insurance, depending on the exact location where you buy. It's important to research these recurring costs, since they can add up.

Other Debts

To be approved for a mortgage, you must go through a stringent underwriting process, which will include providing documentation of how much money you make. During this process, the underwriter will also look at other outstanding debts you have, including car, credit card, and student loan payments. These debts, along with your new proposed mortgage payment, property taxes, and homeowners insurance premium, are added and then divided by your monthly income. This ratio is known as the debt-to-income ratio. The more debts you have, the lower the mortgage amount you will qualify for. This is done to ensure you will be able to comfortably pay all of your bills, without over-extending your monthly budget.

Narrowing Your Choices

Purchasing a home is a big step in anyone's life. There are many more things you'll want to consider besides what is listed here, but at the very least, you now have a better understanding of how much you must earn to purchase a home in various major cities across the United States. From here, you can narrow your decision and start putting your plans into action.

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How Much Do You Need to Earn to Buy a House in a Major U.S. City?