Only six major U.S. cities have average home prices that a household with the local median income could afford.
A April report from Clever Real Estate compared the income needed to afford a house in major U.S. cities with the actual income earned by a typical household.
The report considered a house reasonably priced for a specific buyer if it met popular requirements 28/36 rulewhich advises buyers to spend a maximum of 28% of their monthly income on housing, plus a further 8% to pay other debts equivalent to bank card or automotive bills.
Even with a 20% down payment, the typical home buyer paying the local average wage wouldn’t give you the chance to afford a house priced at average market rate in 44 out of fifty major cities.
Home mortgage rates are also currently high, which could prevent sellers from listing homes and buyers from purchasing them.
Related: The “Silver Tsunami” Meets “Golden Handcuffs” as Previously Low Mortgage Rates Lure Homeowners Whether They Like It or Not
Here are the six cities with homes that average earners can afford.
1. Pittsburgh, Pennsylvania
Pittsburg, Pennsylvania. Photo credit: Getty Images
Actual income: $70,607
Income required to afford the typical home: $59,919
Local median home sales price: $199,573
2. Cleveland, Ohio
Actual income: $65,198
Income required to afford the typical home: $56,378
Local median home sales price: $182,652
3. St. Louis, Missouri
St Louis, Missouri. Photo credit: Getty Images
Actual income: $74,531
Income required to afford the typical home: $66,743
Local median home sales price: $225,674
4. Memphis, Tennessee
Actual income: $64,008
Income required to afford the typical home: $61,659
Local median home sales price: $213,929
5. Indianapolis, Indiana
Actual income: $75,824
Income required to afford the typical home: $73,398
Local median home sales price: $257,584
6.Birmingham, Ala
Birmingham, Ala. Photo credit: Getty Images
Actual income: $67,242
Income required to afford the typical home: $65,216
Local median home sales price: $235,212
