We sought to find how big of a home you could purchase with $400,000 in the 100 largest U.S. cities. We considered the average price per square foot for homes sold from April 2022 through March 2023 using data from Redfin. Perhaps surprisingly, Los Angeles slightly outperforms Irvine regarding home affordability. However, the average price per square foot for single-family homes in Los Angeles is slightly lower, at $665 (compared to $721).
Real Estate
These loans provide the money to buy a home along with funds to rehabilitate the property. Some of Abilene’s best features include above-average schools, plenty of parks, and are a three- to four-hour drive to Dallas and Austin, respectively. The employment situation here needs work, according to Niche, but Abilene generally scores well in diversity, weather and commute lengths. The Midwest also scored highest on NAR’s Affordability Index, which measures whether a typical family earns enough income to qualify for a mortgage in that region. Just go to our home page and scroll down to our suite of mortgage tools.
Homebuyers must earn more than $400,000 to afford a home in the 2 priciest metro areas — and New York isn’t one of them
The median sales price on single-family houses in Pittsburgh is $225,900. Many current home listings boast charming exteriors, renovated interiors, and extra backyard amenities such as decks and fish ponds. Just a few homes look bad enough to require updates before moving in.
Homebuyers must earn more than $400,000 to afford a home in the 2 priciest metro areas — and New York isn’t one of them - CNBC
Homebuyers must earn more than $400,000 to afford a home in the 2 priciest metro areas — and New York isn’t one of them.
Posted: Wed, 25 Oct 2023 07:00:00 GMT [source]
What’s the minimum amount you can put down with different mortgage types?
Your minimum down payment for a $400K house with an FHA loan can be $14,000. Your minimum down payment for a $400K house with a conforming loan can be as low as $12,000. If the federal government isn’t backing (partly guaranteeing) a loan, it’s called a conventional mortgage. You’ll discover the premium you’ll pay in the loan estimates (quotes) you’ll receive from lenders when you comparison shop for your mortgage.
$400,000 Homes in Indiana, Virginia and New York
The median home value in Fremont, California, is roughly $1.2 million, according to 2021 Census Bureau data. The share of first-time homebuyers dipped to 27% in September, down from 29% in August, according to the Realtors Confidence Index survey. Three more California metros — Anaheim, Oakland and San Diego — round out the top five, requiring interested buyers to earn between $240,000 and $300,000 annually. To put those figures into perspective, the median U.S. household income was $75,000 in 2022, according to the report. Residents can easily drive to Montreal, New York City and Boston within 3.5 hours, or quickly escape to the nearby Finger Lakes wine region and the Berkshires of Massachusetts.
The average price per square foot in the Golden City is $996 for all homes and $1,019 for single-family homes. Lenders may also offer their own financial assistance or other low-down-payment loans, such as conventional loans with 3% down and FHA loans with 3.5% down. The year-over-year unemployment rate has increased in Fort Wayne, although the labor market has been more resilient than the national average. Most people in this city work in transportation, utilities, manufacturing, and education and health services.
The listings on Realtor.com in this price range looked well-kept but could use some updates. In the center of town, you’ll find turn-of-the-century brownstones—and one or two of the one-bedroom listings come with a price tag under $300,000. Bankrate’s home-affordability calculator can help you figure out what salary is needed to afford a $400,000 home. Based on these numbers, your monthly mortgage payment would be around $2,470. Over the past year, the average price per square foot for single-family residential homes in Fremont was $952. The estimated size of a $400,000 home is 420 square feet—barely larger than in San Francisco.
Average new home sales price in the U.S. 2023 - Statista
Average new home sales price in the U.S. 2023.
Posted: Fri, 16 Feb 2024 08:00:00 GMT [source]
Faster, easier mortgage lending
The median income in these cities is high, but so are real estate prices. Higher interest rates have increased the cost to borrow, so buyers will need to show significant income to get a mortgage. According to one rule of thumb, you should spend no more than 28% of your pretax income on your housing payment and 36% on all your debts combined.
San Francisco
In some markets $400K may get you a modest cottage, if that, while in others it can buy a veritable mansion. Let’s see how the 28/36 rule checks out using the income determined above of $105,864 per year. Dividing by 12, that breaks down to $8,822 per month, and 28 percent of $8,822 is about $2,470. So that would be the limit of what you should spend on housing — meaning $105,864 is the minimum income you’d need to comfortably afford that $400,000 home purchase.
Kim Porter began her career as a writer and an editor focusing on personal finance in 2010. Since then, her work has been published everywhere from Forbes Advisor to U.S. News & World Report, Fortune, NextAdvisor, Credit Karma, Bankrate, and more.
However, it’s highly unlikely mortgage rates will drop to 2021 levels, according to Derek Amos, senior mortgage loan originator with Mutual of Omaha Mortgage. Don’t stop monitoring the factors listed above once you go into contract. It can take weeks or even months before your purchase closes, and you don’t want anything to change your finances until the deal is completely done. For example, don’t apply for new credit cards or make purchases that require financing, like a car, because those can affect your credit score. And if possible, don’t switch jobs or make any big life changes, such as getting married, either. In addition, keep in mind that a $400,000 home can look vastly different from one location to another.
The sole exception is for those with VA loans, which don’t do continuing mortgage insurance. The monthly mortgage payment on a $400,000 home can also vary significantly. For instance, your loan type (variable versus fixed rate), down payment amount, property taxes, homeowners insurance, and interest rate will all have an impact on your monthly payment. Even though it’s often recommended that homebuyers put down at least 20% on a home purchase, the typical down payment for first-time homebuyers is closer to 7%. Keep in mind that when putting down less than 20% on a conventional mortgage, you’ll need to pay private mortgage insurance (PMI) until you accumulate 20% equity in the home. Bankrate.com is an independent, advertising-supported publisher and comparison service.
This can help you better estimate your payments using a mortgage calculator. Once you find a property, you can ask your lender about locking your mortgage rate. You’ll need a down payment of $12,000, or 3 percent, if you’re buying a $400K house with a conventional loan. Meanwhile, an FHA loan requires a slightly higher down payment of $14,000, equivalent to 3.5 percent of the purchase price.
If you are in an eligible military-related group and can overcome that credit score obstacle, you’re in an excellent position to buy a home. Interest rates are another major piece of the housing affordability puzzle. Since March 2022, the Fed has increased the federal funds rate 11 times. These rate hikes, in turn, have driven up the cost of consumer borrowing, including mortgages. This is a lower down payment option that may be suitable for buyers who want to purchase the property sooner with a smaller initial cash requirement. Situated on the western tip of Lake Erie, Ohio’s Toledo ranks second for cities where $400,000 goes the furthest regarding home purchases.
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