Triangle sees a ‘shocking’ decline in the number of starter homes for sale
Raleigh home prices continue to creep up, but the salary you need to pay the mortgage has increased more dramatically.
A new study from mortgage research site HSH.com shows that to afford the median home in Raleigh, you now need to make a salary of $61,806.27 — a 9.5 percent bump from the salary you would have needed last year.
The median home price in the city, however, went up 4.42 percent over last year. It’s now $290,600, according to HSH.com. (That price includes principal, interest, property tax and homeowner’s insurance.)
What’s causing the need for more income in addition to the higher home price tag?
Higher mortgage rates and higher taxes. Mortgage rates on a 30-year fixed loan have increased from 3.97 percent last summer to around 4.66 percent this year.
Of the 50 largest metro areas that HSH.com studied, Raleigh ranks about middle of the pack in terms of affordability. The national average for salary is $61,522.46 to afford a monthly home payment of $1,435.52 — numbers that are comparable to Raleigh.
In Charlotte — the only other NC city in the study — it would take a salary of $53,991.48 per year to afford the median priced home, which HSH.com says is $252,400.
HSH.com’s estimates are built around a 20 percent down payment, a mortgage rate of 4.66 percent as well as local tax and insurance costs, which in Raleigh would equate to a median down payment of $58,120.
That would put monthly mortgage payments at $1,442.15, according to HSH.com. If the buyer puts only 10 percent down, HSH.com’s study said the required salary needed to make monthly mortgage payments would rise to $72,065.32.
The estimates in HSH.com’s study are in line with the median household income estimates in Wake County. The U.S. Census Bureau estimates that median household income in Wake County is $70,620.
Cities where you would need a higher salary than in Raleigh include: Minneapolis ($63,961), Dallas ($67,209), Austin ($77,466) and Denver ($93,263).
The metro area that would require the highest salary is San Jose, California, where someone would need to make $274,623.19 per year to afford the median home price of $1,405,000.
But Raleigh is also outpacing several similar metro areas across the country in terms of affordability, including Philadelphia ($58,902 salary needed), Atlanta ($50,628), Nashville ($55,656) and Tampa ($54,627).