Company Calculates How Much Money You Need to Make to Buy a Home in Phoenix
Good news: By one measure, you need to make only about $33,000 a year to buy an average home in Phoenix.
Bad news: In reality, you're probably going to need a lot more than that.
HSH, a company that does mortgage research, tried to figure out what kind of salary you'd need to buy a house at the median home price in some of America's largest cities.
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In Cleveland, they figure you'll need to make less than $20,000 to buy an average home. In San Francisco, you'd need more than $115,000 a year.
Phoenix was around the middle, with the company suggesting you need an annual salary of $32,811.94 to afford a median-priced home, at $192,700.
Now, for the caveats.
First, this is after-tax income. Assuming you're single, don't have any dependents, and no exemptions, that means your salary would actually have to be around $42,000 a year, before taxes.
Second, this measure assumes you make a down payment of 20 percent on this home (because people making $42,000 a year usually have more than $38,000 in cash, right?).
And then there's the last caveat from HSH:
There is no doubt that your income will need to be much higher, possibly even double or triple this level, to cover the needed taxes, insurance, and other expenses to live in the home, plus the down payment and any other debts you might have. Since those are highly variable, down to even the individual property level and personal choice, there is no adequate way to factor for them.
So if you make about $33,000 after taxes, you might be able to buy an average house in Phoenix.
As of a couple years ago, the median household income in Phoenix (pre-tax) was about $44,000. The home ownership rate in Phoenix from 2008 to 2012 was a little shy of 57 percent, so it certainly seems reasonable that a home can be purchased with about $33,000 in take-home pay.
Click here to check out the information on all the 25 cities HSH evaluated.
Got a tip? Send it to: Matthew Hendley.
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