We've reported on a number of studies lately about buying a house, buying a house if you're a millennial, renting, or just living comfortably in Detroit. Let's go over the latest and then talk about what the reality means.
The most recent report shows that metro Detroiters need $35,537.89 to buy a house. Out of 27 metro areas (repeat: metro areas, not Detroit proper), Detroit ranks 5th in affordability, according to a new study from HSH.com. The study looked at a few factors: the National Association of Realtors’ 2016 first-quarter data for median-home prices and HSH.com’s 2016 first-quarter average interest rate for 30-year fixed-rate mortgages. Their numbers come from the base cost of owning a home - principal, taxes, insurance, and interest. (Not car insurance, as many of you, including me, would factor in.)
Detroit was fifth behind Pittsburgh, Cleveland, Cincinnati, and St. Louis in affordability.
The median home price in metro Detroit was $142,030 last quarter. The group also looked at how much you save making a 20 percent down payment compared to 10 percent.
"Detroit-area borrowers making a 10 percent down payment (compared to 20 percent) must earn over $4,900 more per year in order to afford the larger loan amount ($14,203) and the monthly mortgage insurance ($47/month) associated with the smaller down payment. "
Basically, most of these reports say you need to make between $35-43,000 to live here.
While all of these studies show that Detroit's quite a bit more affordable than other cities, they're only reporting numbers. They don't factor in other affordability issues like car insurance or rehabbing a home (since move-in ready homes go quick here); or frustrating issues like the lack of grocery stores, retail, and public transportation in the city; or much, much bigger issues like the crisis with the schools, safety, lack of jobs, and many of the neighborhoods still not getting attention like others.
So Curbed Detroit readers, what do you think? What would you tell people who are thinking of moving to Detroit and looking at these numbers? What are the most important issues for you?
- The salary you must earn to buy a home in 27 metros [HSH.com]
- Can Millennials in Detroit Afford a Down Payment on a Home? [Curbed Detroit]
- How Much Should You Make to Live Comfortably in Detroit? [Curbed Detroit]
- How Much Should You Make to Afford Rent in Detroit? [Curbed Detroit]
- Detroit Home Buyers More Likely to Pay Under Listing Price [Curbed Detroit]