You Need to Make $400,000 to Buy a Home in the City

How much do you need to make to buy a typical home in the United States? The answer is $115,00, according to Redfin. It is breathtaking when one considers that it is up 50% since the start of the pandemic. Mortgage rates were low back then. That made housing more affordable. Then, to some extent, the work-from-home economy increased prices and sales slowed. The scarcity was so great that there were bidding wars on some homes. (This is the hottest housing market in America.)

In a few markets, the prices of homes are more than triple the U.S. median. Most are on the coast, and some are in Florida. It is particularly true on the West Coast near the big tech companies, which grew fast enough to make hundreds of thousands of people wealthy. At the center of that hub is San Francisco, where people must make a median of $404,000 to buy a home with a median value for the metro. Keep in mind that the median household income in the United States is about $70,000. In the city right next door, San Jose, the comparable figure is $402,000.

These two cities were built on the bedrock of the tech boom, which began in the 1980s when Microsoft was founded. Google was launched since then, and so were Amazon, Facebook and hundreds of smaller others. Even mid-level employees with stock options could cash out with seven-figure exits.
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It is hard to say whether San Francisco will remain the nation’s most expensive housing market. The city is falling apart because of homelessness and crime. Many large retailers and hotels have pulled out, and that exodus will continue. The very rich can afford to move almost anywhere else.
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Which cities have real estate that requires the lowest income to buy a house? Several are in the Rust Belt, which was the San Francisco of 75 years ago. Some of these cities have lost half their populations. Most major businesses have left as well. In Detroit, the median income needed to buy a home is just $51,000.