Study: Salary you need to afford a home in Birmingham metro

Windows of Skyscraper Business Office, Corporate building in London City, England, UK

The downtown Birmingham skyline is seen from Legion Field in Birmingham, Ala., Saturday, Oct. 5, 2013. (Mark Almond/malmond@al.com)

Homebuyers in the Birmingham metropolitan area need to make, at least, $41,717.33 a year to afford to purchase a median-price home, according to a new analysis from HSH.com.

Despite being one of the affordable metros in the U.S., homebuyers in the Birmingham metro saw an increase of more than $3,000 in the required salary during the second quarter of the year, the website stated. Home prices grew by 12.62 percent in a quarterly comparison.

If homebuyers put 10 percent down instead of 20 percent, the required salary increases to $48,645.87, according to HSH.com

The Birmingham metro still remains one of the 25 least expensive of the 50 largest metro areas in the country. The metro area includes: Bibb, Blount, Chilton, Jefferson, St. Clair, Shelby, and Walker counties.

The average mortgage rate in Birmingham metro is 4.11 percent. The median home price is $206,100, according to HSH.com. The averagely monthly payment is $973.40.

HSH.com is the nation’s largest publisher of mortgage and consumer loan information.

To come up with the average salary required to purchase a home, HSH.com calculates the annual before-tax income required to cover the mortgage’s principal, interest, property tax and homeowner’s insurance payment. HSH.com uses standard 28 percent “front-end” debt ratios and a 20 percent down payment subtracted from the median-home-price data to arrive at the figures.

Loans with less than a 20 percent down payment will incur mortgage insurance, which would increase the required salary and require private mortgage insurance.

Source Article::http://www.al.com/news/birmingham/index.ssf/2017/08/this_is_how_much_you_need_to_m.html

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