How Much You Need To Earn To Afford A Home In Providence

It's no secret that cost of buying a home is on the rise in Rhode Island, making the required salary needed to afford real estate equally high. According to a new study, the average salary required to afford a home Providence is nearly $75,000.

The study, released by the mortgage resource website HSH.com, used the latest available 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.

According to the study, which used home-price data from the fourth quarter of 2018, the salary needed to buy a home in Providence is $74,430.80, the 15th-highest in the country. This applies to a 20 percent down payment on a $294,200 home, the average cost for the area. If the down payment was just 10 percent, the required salary rises to $84,715.95.

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, California was the least affordable metropolitan area on the list, while the Pittsburgh, Pennsylvania area was the most affordable metropolitan area. The study found that the difference in salary required between the two areas to afford a home was a whopping $217,000.

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.