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Abstract:In some expensive housing markets, it can still be a stretch for even the highest earners to comfortably afford a home, a LendingTree report found.
Housing is the biggest recurring expense most Americans face.
In some expensive housing markets, it can still be a stretch for even the highest earners to comfortably afford a home, a new LendingTree report found.
In San Jose and San Francisco, typical workers in the highest-paying industries spend at least $200 more on housing costs than they should.
The highest-paid workers in 10 other metro areas have less than $800 a month left over after covering housing costs, assuming they own a median-priced home.
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Housing is the biggest recurring expense most Americans face.
According to a new report from LendingTree's chief economist Tendayi Kapfidze, working in a metro area's highest-paying industry can make it easier to afford a home in the median price range.
However, in a few more expensive real-estate markets, Kapfidze discovered, it can still be a stretch to comfortably afford housing despite a high salary.
In his analysis, Kapfidze defined “affordable” as spending no more than 28% of annual gross income on housing costs. By this measurement, workers in the highest-earning industries in San Jose and San Francisco struggle to afford median-priced homes, spending more than $200 a month on housing costs than they should.
While these Silicon Valley metros are the only places where the estimated monthly housing payment for a median-priced home exceeds affordability standards, several other cities come close. The monthly payment was calculated assuming a 20% down payment and mortgage with a 4.25% interest rate.
The highest-paid workers in 10 other metro areas have less than $800 a month left over after covering housing costs, assuming they own a median-priced home, according to the LendingTree report.
An important note: Income figures used in this analysis are from 2017 and represent the median salary of an individual working in that industry, not the total income of a household. A dual-income household could likely afford a higher monthly payment. You can find the full methodology here.
Below are the metro areas where typical workers in the highest-paid industries — most commonly legal, architecture and engineering, and computers and mathematics — have the narrowest margin between what they can comfortably afford and what they likely pay for a home.
Disclaimer:
The views in this article only represent the author's personal views, and do not constitute investment advice on this platform. This platform does not guarantee the accuracy, completeness and timeliness of the information in the article, and will not be liable for any loss caused by the use of or reliance on the information in the article.
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