You need to earn six figures to qualify to buy a home in San Jose, California.Sean O'Flaherty aka Seano1 atwal singh, Wikimedia CommonsIn the final quarter of 2016, home prices in the US climbed past expectations as the housing supply reached record lows, according to the National Association of Realtors (NAR).
On average, 87% of the 150 housing markets tracked by NAR experienced rising home prices in 2016, up from an average of 75% in 2014. More than half of the markets (52%) now have a median sale price either at or above their previous record high.
"Buyer interest stayed elevated in most areas thanks to mortgage rates under 4% for most of the year and the creation of 1.7 million new jobs edging the job market closer to full employment," said Lawrence Yun, NAR chief economist. "At the same time, the inability for supply to catch up with this demand drove prices higher and continued to put a tight affordability squeeze on those trying to reach the market."
The group reports that while the national median family income rose to $70,831, increasing mortgage rates and home prices will affect Americans' ability to buy a home, specifically in the country's most expensive housing markets.
Using NAR's data on housing affordability, we gathered a list of the US metro areas where the minimum salary required to qualify for a mortgage, with 20% down, is the highest. NAR assumes a mortgage rate of 3.9% for all areas, with the monthly principle and interest payment limited to 25% of income.
For the US as a whole, the average qualifying income is $42,962 and the median home price is $232,200.
Notably, the salary needed to qualify in the top-five metro areas — four of which are located in California — exceeds $100,000.
Below, check out how much you need to earn to buy a home in the most expensive housing markets, and what the median home will cost you.
The following markets are based on metropolitan statistical areas, with the exception of Anaheim-Santa Ana-Irvine and Los Angeles-Long Beach-Glendale, which are metropolitan divisions.
23. Salt Lake City, Utah
Population: 1,170,266
Median home cost: $282,100
Salary needed to buy: $51,572
22. Austin-Round Rock, Texas
Lifted Up Aerial Photography/Shutterstock Population: 2,000,860
Median home cost: $287,600
Salary needed to buy: $52,578
21. Burlington-South Burlington, Vermont
Erika J Mitchell/Shutterstock Population: 214,363
Median home cost: $291,300
Salary needed to buy: $53,254
20. Reno, Nevada
Andrew Zarivny/Shutterstock Population: 450,890
Median home cost: $308,700
Salary needed to buy: $56,435
19. Miami-Fort Lauderdale-West Palm Beach, Florida
Richard Cavalleri/Shutterstock Population: 6,012,331
Median home cost: $310,500
Salary needed to buy: $56,764
18. Riverside-San Bernardino-Ontario, California
Population: 4,489,159
Median home cost: $317,700
Salary needed to buy: $58,081
17. Sacramento-Roseville-Arden Arcade, California
Andrew Zarivny/Shutterstock Population: 2,274,194
Median home cost: 324,300
Salary needed to buy: $59,287
16. Portland-Vancouver-Hillsboro, Oregon/Washington
Josemaria Toscano/Shutterstock Population: 2,389,228
Median home cost: $354,700
Salary needed to buy: $64,845
15. Bridgeport-Stamford-Norwalk, Connecticut
Kotsovolos Panagiotis/Shutterstock Population: 948,053
Median home cost: $359,800
Salary needed to buy: $65,777
14. Barnstable Town, Massachusetts
Population: 214,333
Median home cost: $377,900
Salary needed to buy: $69,086
13. Denver-Aurora-Lakewood, Colorado
Andrew Zarivny/Shutterstock Population: 2,814,330
Median home cost: $381,600
Salary needed to buy: $69,763
12. New York-Newark-Jersey City, New York/New Jersey/Pennsylvania
Population: 20,182,305
Median home cost: $382,300
Salary needed to buy: $69,891
11. Washington-Arlington-Alexandria, Washington, DC/Virginia/Maryland
Population: 6,097,684
Median home cost: $384,300
Salary needed to buy: $70,256
10. Naples-Immokalee-Marco Island, Florida
Stephen Orsillo/Shutterstock Population: 357,305
Median home cost: $415,000
Salary needed to buy: $75,869
9. Boston-Cambridge-Newton, Massachusetts/New Hampshire
Marcio Jose Bastos Silva/Shutterstock Population: 4,774,321
Median home cost: $417,400
Salary needed to buy: $76,307
8. Seattle-Tacoma-Bellevue, Washington
kan_khampanya/Shutterstock Population: 3,733,580
Median home cost: $423,300
Salary needed to buy: $77,386
7. Boulder, Colorado
Facebook/City of Boulder Colorado Government Population: 319,372
Median home cost: $494,800
Salary needed to buy: $90,457
6. Los Angeles-Long Beach-Glendale, California
Population: 10,170,292
Median home cost: $503,400
Salary needed to buy: $92,030
5. San Diego-Carlsbad, California
Population: 3,299,521
Median home cost: $593,000
Salary needed to buy: $108,410
4. Urban Honolulu, Hawaii
Population: 998,714
Median home cost: $740,200
Salary needed to buy: $135,320
3. Anaheim-Santa Ana-Irvine, California
LagunaticPhoto/Shutterstock Population: 3,169,776
Median home cost: $745,200
Salary needed to buy: $136,234
2. San Francisco-Oakland-Hayward, California
Population: 4,656,132
Median home cost: $837,500
Salary needed to buy: $153,108
1. San Jose-Sunnyvale-Santa Clara, California
Sean O'Flaherty aka Seano1 atwal singh, Wikimedia Commons Population: 1,976,836
Median home cost: $1,005,000
Salary needed to buy: $183,730