In Seattle Area, Only Six Figure-Earners Can Afford A Home: Study

SEATTLE, WA - The cost of buying a home in the Seattle metro area continues to be out of reach for all but the highest earners. A new study shows you have to earn six figures or higher (and have the right down payment) to be able to buy a home here.

The study by mortgage resource website HSH.com says you need to earn at least $105,000 to afford a home in the Seattle metropolitan area, which includes cities like Bellevue and Tacoma. That's nearly double the national average of $61,453.51.

But there's a caveat: that figure is for people who have a 20 percent down payment. If you put down less than that, you would have to earn $122,484.17. That's because lower down payments require mortgage insurance, and that means a higher monthly mortgage bill.

A 20 percent down payment is too high a hurdle for many. On a $450,000 home, that's a $90,000 down payment.

The HSH.com study used quarterly home-price information from the National Association of Realtors, and incorporates local property tax and homeowner’s insurance costs to calculate the income needed to qualify for a median-priced home.

Seattle was No. 7 in the top 25 metro areas for the size salary you need to afford to buy a home. In cities like Minneapolis, Orlando, and Houston, you only have to earn about $65,000 per year to afford a home.

The S&P CoreLogic Case-Shiller 20-city home price index released Tuesday showed that home prices in Puget Sound are still growing, but at about half the rate compared to one year ago. In 2018, home prices were rising by 12 percent year-over-year. Today's index showed annual growth of about 5.1 percent.

San Jose was the least affordable metropolitan area in the HSH.com study, and Pittsburgh was the most affordable. The study found that the difference in salary required between the two areas to afford a home was a whopping $217,000.

According to the study, median home prices in the fourth quarter of 2018 were lower compared to the third quarter of 2018. However, it noted that this was not uncommon and it doesn’t indicate that homes are becoming more affordable.

San Jose was also the only metropolitan area to see a year-over-year decline in median home prices. The median home prices in all 49 other metro areas ranked in the study stayed the same or saw an increase. However, HSH.com says nationally, there appears to be evidence that the rate at which home prices are increasing has started to slow.

The 10 most expensive metros for buying a home are:

• San Jose (Salary needed: $254,835.73)
• San Francisco (Salary needed: $198,978.01)
• San Diego (Salary needed: $131,640.79)
• Los Angeles (Salary needed: $123,156.01)
• Boston (Salary needed: $106,789.93)
• New York City (Salary needed: $105,684.33)
• Seattle (Salary needed: $105,367.89)
• Washington D.C. (Salary needed: $94,408.70)
• Denver (Salary needed: $91,672.45)
• Portland (Salary needed: $85,173.08)

The 10 least expensive metros for buying a home are:

• Pittsburgh (Salary needed: $37,659.86)
• Cleveland (Salary needed: $40,437.72)
• Oklahoma City (Salary needed: $41,335.41)
• Memphis (Salary needed: $41,400.93)
• Indianapolis (Salary needed: $42,288.92)
• Louisville (Salary needed: $42,323.15)
• Cincinnati (Salary needed: $43,429.97)
• St Louis (Salary needed: $44,215.56)
• Birmingham (Salary needed: $44,593.35)
• Buffalo (Salary needed: $45,698.05)

You can read the full study from HSH.com here.