Owning a home is one of the most effective ways for Americans to build wealth over time. According to findings from Clever Real Estate, of the 50 largest U.S. metro areas, only six have home prices low enough to be considered affordable for the median-earning household. Pittsburgh comes in at #1 on this list.
For one’s home to be considered affordable, a household should spend no more than 28% of its gross monthly income on housing, while using an additional 8% to pay off debts, according to the popular 28/36 rule of housing affordability.
The six cities where the median-priced home is affordable for median earners are:
- Pittsburgh, Pennsylvania
- Cleveland, Ohio
- St. Louis, Missouri
- Memphis, Tennessee
- Indianapolis, Indiana
- Birmingham, Alabama
In Pittsburgh, the median home sells for $199,573. After a 20% down payment, the mortgage payment, including taxes and insurance, costs $1,398 per month, or $16,777 per year, based on a 30-year mortgage.
To afford that mortgage without exceeding 28% of one’s income, a household would need to earn about $59,919 per year. The median household income in Pittsburgh is $70,607, meaning it’s possible to comfortably afford a median-priced home.
