We’ve gotta admit: when we see a new study released regarding buying a home in NYC, we don’t necessarily look forward to reading it. That’s because the last two studies we read found that in order to buy a home in NYC you need to have a salary of $186.1K –though in Manhattan your $100K salary only amounts to a mere $30K –and New York has the sixth highest property tax rates in the country. So yeah, to say being a first-time home buyer in NYC is intimidating is certainly the understatement of the century. To add insult to injury, a new study just revealed what percent of homeowners’ annual income is spent on homeownership, and in NYC the numbers are pretty bleak…
RealtyHop recently released its April Housing Affordability Index to determine if homeownership is affordable–or even possible at all–for the average American family. The index was created via proprietary and ACS Census data analyzed across the 100 most populous cities in the country, including:
- Projected median household income
- Median for-sale home listing prices via RealtyHop data
- Local property taxes via ACS Census data
- Mortgage expenses, assuming a 30-year mortgage, a 6.682% mortgage interest rate based on reported weekly averages in the past four weeks, and a 20% down payment
The study found that homebuyers in 77 out of the 100 major cities analyzed spend over 30% of their annual income on homeownership. In NYC, however, this number is more than doubled, with homeowners spending 70.7% of their monthly income on homeownership costs. The study writes:
New York City is the fourth least affordable housing market this month. With a median list price of $850,000, households with a median income of $83,770 can expect to spend 69.81% of their earnings on housing each month…