According to the report of Redfin, a typical middle-class household in Detroit, the United States only needs to save less than half of its total annual income to be able to buy a house with a median price at here.
A recent study by Redfin real estate company surveyed the relationship between average household income and average home prices in major US cities. Accordingly, Detroit home prices are considered the most affordable because a household here only needs to spend nearly half of their income in the year to be able to own a house in the middle segment.
Meanwhile, in San Francisco – America’s most expensive housing market, a similar household takes 3 years of income to have the opportunity to own their own home. Specifically, the average household income here is 92,714 USD, far less than the 265,000 USD needed each year to buy a house with an average price of about 1.42 million USD.
All five of the most expensive, big cities are located in California. In Anaheim, including Orange County, a household needs to earn $135,554 per year to buy a regular home, while the area’s average household income is only $65,331. In San Jose, a household needs more than $215,000 a year to buy, double their real income. The same story happened in Los Angeles and San Diego.
Redfin’s real estate broker, Kalena Masching, said: “In expensive areas like the San Francisco Bay Area, many people are said to earn a lot of money but can’t afford to buy that house. Even those who are able to pay more than $7,000 per month for mortgage payments are also having difficulty saving enough initial payments when signing a purchase contract. The rent is too high, making it harder for them to save. A lot of people who buy houses in this area are asking for help from their families to pay”.
In contrast, people in the cities of Detroit, Rochester and Buffalo in western New York, or Dayton, Ohio, can earn less, but their home-buying war seems much easier. There are places where families only need to earn about $30,000 per year, which is only half the average household income, to buy a regular home.