How much do I need to earn to afford an average house in the Denver metro?
That’s a question a report out this month from HSH.com® aims to tackle along with the salaries required to afford median-priced homes in 26 other U.S. metro areas.
The report calculates that to afford everything that makes up a mortgage payment (home loan principal, interest, taxes, and insurance payments) for a median-priced Denver metro area home a homebuyer needs to earn a salary of $72,772. The median price for a home in the Denver metro area was $381,600 in the fourth quarter of 2016.
The salary needed to purchase a median Denver metro home increased $2,031 from the third quarter of 2016. That is slightly more than the national average increase in salary needed of $1,583 over that same time period.
The salary calculation is based on a 3.97 percent 30-year fixed mortgage rate and monthly payments of $1,698 and assumes a 20 percent down payment. If a homebuyer were to put down only 10 percent, the required salary would increase to $85,948.
Denver is ranked 20th out of the 27 metro areas for salary needed to afford a median-priced home, between #19 Portland at $70,895 and #21 Washington DC at $80,230. Pittsburgh required the lowest salary at $32,374 for a $130,000 home. The highest salary required was $160,590 for a median home price of $837,500 in San Francisco.
The national median home price is $235,000 with monthly payments of $1,212, requiring a salary of $51,963. The salary needed to purchase median homes rose in all but five of the 27 markets.